Eli Whitney III receives a patent for the rayon gin, a product for which there are no close substitutes. Eli will maximize his profit when
a. MR is maximized
b. MR = MC
c. MR > MC
d. MR < MC
e. P = MR > MC
B
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In the aggregate expenditures diagram, the 45° line represents the equilibrium condition that
A. Y* = Y. B. AE = C + I + G + NX. C. I = C. D. Y = AE.
An increase in the discount rate will result in:
A) increase in bank reserves and a decrease in the federal funds rate. B) increase in bank reserves and an increase in the federal funds rate. C) decrease in bank reserves and a decrease in the federal funds rate. D) decrease in bank reserves and an increase in the federal funds rate.
In foreign exchange markets, a U.S. resident who imports New Zealand apples is:
a. a demander and supplier of New Zealand dollars. b. a demander and supplier of U.S. dollars. c. a demander of New Zealand dollars and a supplier of U.S. dollars. d. a supplier of both New Zealand dollars and U.S. dollars. e. a supplier of New Zealand dollars and a demander of U.S. dollars.
The sacrifice ratio is
A. the number of percentage points that the unemployment rate rises when output declines by one percentage point. B. the percentage change in employment when output declines by one percentage point. C. the percentage reduction in inflation when output falls one percentage point below potential. D. the amount of output lost when the inflation rate is reduced by one percentage point.