Refer to Figure 8.2. At P = $80, how much is profit in the short run?
A) $88
B) $306
C) $351
D) $1000
E) $1024
C
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Assume that the reserve ratio is 20% and banks in the system are loaning out all their excess reserve. If people collectively cash out $10 billion from their checking accounts, then the lending ability of the banking system will be
A. increased by $10 billion. B. decreased by $40 billion. C. decreased by $50 billion. D. decreased by $10 billion.
In a simple, private economy, suppose that the MPC is .8 and investment rises by $20 million. At the new equilibrium, how much will saving have increased?
a. $8 million b. $16 million c. $20 million d. $80 million e. $100 million
The mechanism by which tax and transfer changes affect output differs from the process discussed above for government spending.
What will be an ideal response?
What is marginal revenue?
What will be an ideal response?