In the short run, the price level will rise whenever there is an economy-wide decrease in unit costs
a. True
b. False
B
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Irene’s Dairy is deciding whether or not to enter the market for ice cream, currently monopolized by Mattie’s Ice-cream. If it enters the market, Mattie’s can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war. In a sequential game, if Irene decides to enter the market, what would be Mattie’s best response? Accommodate Fight Run away Shut down
a. Shut down b. Fight c. Run away d. Accommodate
Use the following graph of the total demand for money to answer the next question.
Assume we begin at point a. A decrease in the nominal GDP will can be shown as a move to ________.
A. point b B. point c C. point d D. point e
Transaction costs are
A) all unnecessary and wasteful costs. B) any nonmonetary costs associated with a transaction. C) not real costs because they make no positive contribution to economic transactions. D) the costs of arranging agreements between demanders and suppliers. E) the opposite of opportunity costs.
If the money supply is $600 and nominal income is $3,600, the velocity of money is
A) 1/60. B) 1/6. C) 6. D) 60.