If the price of A is $3 and the price of B is $5, then, in a consumer optimum
A. the marginal utility of A must equal 3 and the marginal utility of B must equal 5.
B. the quantity purchased of B must be 67 percent of the quantity of A purchased.
C. the marginal utility of B must be 67 percent more than the marginal utility of A.
D. the quantity purchased of B must be 60 percent of the quantity of A purchased.
Answer: C
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A natural monopoly's output is less if it is regulated with
A) a marginal cost pricing rule than if it is unregulated. B) an average cost pricing rule than if it is unregulated. C) an average cost pricing rule than if it is regulated with a marginal cost pricing rule. D) a marginal cost pricing rule than if it is regulated with an average cost pricing rule. E) More information about the firm's demand is needed to determine how its output depends on what regulation it faces.
The special privileges and obligations of corporations are defined by law.
Answer the following statement true (T) or false (F)
Shoe-leather costs refer to:
A. the money, time, and opportunity used to change prices to keep pace with inflation. B. the time, money, and effort one has to spend managing cash in the face of inflation. C. being penalized via taxes for making more money in dollars, even though real purchasing power hasn't changed at all. D. labor costs associated with inflation.
If a bank uses $500 of excess reserves to make a new loan when the reserve ratio is 8 percent, this action by itself initially makes the money supply
a. and wealth increase by $500. b. and wealth decrease by $500. c. increase by $500 while wealth does not change. d. decrease by $500 while wealth decreases by $500.