The Fed can influence long-term interest rates by
A. affecting people's expectations of future short-term rates.
B. influencing the current one-year rate.
C. influencing the demand for money in the short run.
D. Both A and B are correct.
Answer: D
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Which of the following statements is TRUE about scarcity?
A) Both rich and poor people face the problem of scarcity. B) Scarcity exists only when supply is insufficient to meet demand. C) Scarcity exists only when a shortage exists. D) Scarcity can be eliminated when a country becomes richer.
Refer to the diagram and assume that price increases from $2 to $10. The coefficient of price elasticity of demand (midpoint formula) relating to this change in price is about:
A. .25 and demand is inelastic.
B. 1.5 and demand is elastic.
C. 1 and demand is unit elastic.
D. .67 and demand is inelastic.
In the above figure, if the price is $16 per unit, how many units will a profit maximizing perfectly competitive firm produce?
A) 0 B) 20 C) 30 D) 35
Suppose the market demand curve for a Bertrand duopoly is downward sloping. What happens to the Nash equilibrium price and market quantity if the constant marginal cost declines?
A) Price and quantity decline B) Price increases and quantity declines C) Price decreases and quantity increases D) Price and quantity increase