If an early frost destroys most of the apple crop, the equilibrium price of an apple ________ and the equilibrium quantity ________
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
B
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The Fed tends not to use discount policy as its principal tool in influencing the money supply since
A) discount loans do not affect the money supply. B) it does not have as much control over discount loans as it has on open market operations. C) it is prohibited from doing so by an act of Congress. D) it prefers to use reserve requirements.
Suppose a company expects prices in general to rise by 5%, but the price of its product rises by 2%. How will the company respond to the price change?
A) It will increase production since it's getting a higher price for the product. B) It will increase production more slowly since it's price is rising more slowly than average. C) It will reduce production since it perceives a relative decline in the demand for its product. D) It will stop production and shut down until prices rise more quickly.
Economic growth can be represented by a (an): a. percentage change in real GDP
b. rightward shift of the long-run aggregate supply curve (LRAS). c. outward shift of a production possibilities curve. d. all of the above.
This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope.
The socially optimal number of bags of litter removed from the roadside each day is:
A. 15. B. 10. C. 20. D. 30.