Refer to the data in Figure 22.1. The shape of the total revenue curve indicates that the price of this good
A. Falls at first as output rises, but then rises as output rises.
B. Falls as output rises.
C. Rises as output rises.
D. Stays the same as output rises.
Answer: D
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If a firm offers a senior citizen discount
A) the firm expects the average senior citizen to have a lower price elasticity of demand. B) the firm expects the average senior citizen to have a higher price elasticity of demand. C) senior citizens may be offended. D) it may be prosecuted for discrimination.
In Macroland there is $12,000,000 in currency. The public holds half of the currency and banks hold the rest as reserves. If banks' desired reserve/deposit ratio is 12.5 percent, deposits in Macroland equal ________ and the money supply equals ________.
A. $48,000,000; $75,000,000 B. $96,000,000; $96,000,000 C. $54,000,000; $54,000,000 D. $48,000,000; $54,000,000
The U-shape of the average variable, average total, and marginal cost curves reflects _____
A) increasing marginal returns. B) decreasing marginal returns. C) both increasing and decreasing marginal returns. D) decreasing marginal product. E) the point that implicit costs become a smaller fraction of total cost as output increases.
Asset price bubbles are not sustainable because:
A. they do not reflect an increase in the real productive value of the asset. B. invariably the government steps in to burst the asset price bubble. C. investors eventually run out of assets with which to purchase the good. D. people realize that leverage really doesn't work mathematically.