If the velocity of circulation is 10 and the money supply is $250, the value of transactions will be $25.
Answer the following statement true (T) or false (F)
False
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Use the following graph, where Sd and Dd are the domestic supply and demand curves for a product, to answer the next question.
Suppose the world price of the product is $6. If this market is closed to international trade the total revenue that would go to domestic producers would be ________, and if the market is open to international trade the total revenue for domestic producers would be______.
A. $500; $240 B. $600; $240 C. $600; $120 D. $240; $120
Harry's Hookahs incurs $700,000 per year in explicit costs and $500,000 in implicit costs. The company earns $1.4 million in revenues and has $3.7 million in net worth. Based on this information, what is the accounting profit for Harry's Hookas?
A) $200,000 B) $700,000 C) $900,000 D) $1.1 million
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.
Suppose two firms produce close substitutes such that reducing the price of one product reduces the quantity demanded of the other. If those two firms merge:
A. they can earn higher profits by continuing to sell both products if the profit gained from increased sales of one product are greater than the lost profits from reduced sales of the other product. B. they will eliminate the less profitable product and sell only one. C. they will raise prices on both products. D. they will be unable to earn higher profits because the two products will compete against each other.