During the decade of the 1920s, the distribution of income
(a) became increasingly equal.
(b) changed little or not at all.
(c) became increasingly unequal.
(d) may or may not have changed, but it is difficult to know because of lack of data.
(c)
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If a natural monopoly regulatory commission sets a price where marginal cost is equal to demand
A) the firm would earn monopoly profits. B) the firm would incur a loss. C) economic efficiency would not be achieved. D) the firm would break even.
Joanne left her last job, in which she was earning $50,000, in order to form her own consulting business. Her revenues for the first year of consulting were $210,000. During that year, she hired two assistants for $25,000 each and spent $25,000 on office equipment. In addition, she incurred $75,000 in miscellaneous expenses. Her accounting profit that first year was
A) $10,000. B) $60,000. C) $210,000. D) $50,000.
Assume a market that has an equilibrium price of $8. If the market price is set at $7, consumer surplus:
A. rises for some because of the decreased price. B. decreases for some because of fewer transactions taking place. C. Both of these statements are true. D. Neither of these statements is true.
When the Fed makes bonds more or less attractive, it influences the:
A. Open market decision. B. Money multiplier. C. Portfolio decision. D. Reserve decision.