At very high levels of output, total cost tends to:
A. decrease at an increasing rate.
B. increase at a constant rate.
C. increase at an increasing rate.
D. increase at a decreasing rate.
Answer: C
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John’s Bait Shop was surprised to learn that when it raised prices by 10 percent, total revenue was unaffected. This is because the elasticity for bait is
A. unit elastic. B. inelastic. C. elastic. D. Not enough information is given.
Suppose an economy produces milk and honey, and milk is plotted along the horizontal axis of the production possibilities frontier. The MRT is 2 at the current point of production
If the amount of milk produced is reduced by two units in order to produce one more unit of honey, then: A) the new point of production lies above the production possibilities frontier. B) the new point of production lies on the production possibilities frontier. C) the new point of production lies below the production possibilities frontier. D) we cannot determine where the new point of production lies relative to the production possibilities frontier.
In the long-run, a monopoly is most likely to achieve
a. An average rate of return b. Above average profits c. Economic Profits d. Both B&C
Suppose that you decide that you no longer want to hold currency, and deposit all of your currency holdings to your checking account. What is the immediate or initial impact of this transaction on M1 and M2?
What will be an ideal response?