Refer to the graph shown. If this monopolist were allowed to choose the profit-maximizing level of output, it would produce:
A. 400 units of output.
B. 800 units of output.
C. 500 units of output.
D. 300 units of output.
Answer: A
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Prices are useful in coordinating society’s economic planning because
A. they convey information about which goods are scarce and which are plentiful. B. economies based on price systems are more flexible than centrally planned economies. C. economies based on price systems are more likely than centrally planned economies to minimize the cost of producing society’s output. D. All of the responses are correct.
If money supply and money demand both increased:
a. nominal interest rates would increase and investment would increase b. nominal interest rates would increase and investment would decrease. c. nominal interest rates would decrease and investment would increase. d. the change in nominal interest rates and investment would be indeterminate.
Which best describes the "invisible hand" concept?
a. Sufficiently detailed central direction of an economy will maximize the public's best interests b. The desires of producers and resource suppliers to further their own self-interest will automatically promote the social interest c. The market system works best when resources are highly substitutable d. The problem of scarcity can best be overcome in a system
The greater the required reserve ratio, the:
A. higher is the spending multiplier. B. lower is the spending multiplier. C. lower is the monetary multiplier. D. higher is the monetary multiplier.