Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. 
Suppose Quick Buck and Pushy Sales decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Quick Buck cheats by reducing its price to $1 and Pushy Sales matches the price cut, then if consumers are evenly split between the two firms, what will be Quick Buck's economic profit?
A. $3,000
B. $1,000
C. $2,000
D. $1,500
Answer: D
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In stage III of the demographic transition,
(a) the birth rate and the death rate are relatively low. (b) the birth rate and the death rate are relatively high. (c) the birth rate is relatively high and the death rate is relatively low. (d) the birth rate is relatively low and the death rate is relatively high.
When the required reserve ratio is lowered,
a. the money multiplier increases, and the amount of excess reserves increases in the banking system. b. the money multiplier decreases, and the amount of excess reserves increases in the banking system. c. the money multiplier decreases, and the amount of excess reserves decreases in the banking system. d. the money multiplier increases, and the amount of excess reserves decreases in the banking system. e. there is no change in either the money multiplier or the amount of excess reserves in the banking system.
The XYZ Corporation can make a real (inflation-adjusted) return on an investment of 9 percent. The nominal rate of interest is 13 percent and the rate of inflation is 7 percent. We can conclude that the:
A. investment will be profitable. B. investment will be unprofitable. C. real rate of interest is 4 percent. D. real rate of interest is 2 percent.
The calculation of GDP using the income approach EXCLUDES
A) rent. B) interest. C) environment quality. D) wages. E) profit.