In a general equilibrium model, a tax on a single factor in its use only in a particular sector can affect returns to all factors in all sectors.
A. True
B. False
C. Uncertain
A. True
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Which of the following would most likely be a natural monopoly?
a. Gas utility company b. Agricultural firm c. Youth apparel company d. Automotive manufacturer
What happens to marginal productivity as workers who are equally good at their job are added to a firm?
a. The increase in workers will eventually cause marginal product to fall. b. Marginal product will rise at a steady rate. c. Marginal product will neither rise nor fall. d. Product quality will improve as the new workers gain experience.
Suppose the banking system has $100,000 in outstanding deposits and actual reserves of $35,000. If the required reserve ratio is 25 percent, the maximum amount the banking system can now add to the money supply is:
A. $25,000. B. $10,000. C. $40,000. D. $50,000.
Two goods are complements if:
A. an increase in the price of one good leads to an increase in demand for the other. B. there are no substitutes for either of them. C. people tend to consume either one or the other. D. an increase in the price of one good leads to a decrease in demand for the other.