The inelastic demand for agricultural products means that relatively small increases in supply will result in a relatively:
A. Large decrease in farm prices and total revenue for farmers
B. Small increase in farm prices and total revenue for farmers
C. Small decrease in farm prices and a relatively large increase in total revenue for farmers
D. Large increase in farm prices and a relatively small decrease in total revenue for farmers
A. Large decrease in farm prices and total revenue for farmers
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When drawn against the current real wage, the labor demand curve is
A) upward sloping because the marginal product of labor rises with the quantity of labor employed. B) upward sloping because the marginal product of labor declines with the quantity of labor employed. C) downward sloping because the marginal product of labor rises with the quantity of labor employed. D) downward sloping because the marginal product of labor declines with the quantity of labor employed.
You can either invest in project A or B. Project A could have a value of $150 with a probability of 0.1 or a value of $75 with probability 0.9 . Project B could have a value of $120 with probability 0.2 or a value of $75 with a probability of 0.8 . Which project should you invest in?
a. Project A b. Project B c. Neither of the projects d. You cannot tell from the information presented
A decrease in net wealth will _____
a. shift the consumption function downward b. make the consumption function steeper c. cause an upward movement along the consumption function d. cause a downward movement along the consumption function e. make the consumption function flatter
Which of the following is false?
a. The Fed controls the supply of money, even though privately owned commercial banks actually create and destroy money by making loans. b. With a 10% required reserve ratio, a $10,000 cash deposit in a bank would result in an increase in the bank's excess reserves by $1000. c. With a 10% required reserve ratio, a $1,000 bond purchase by the Fed directly creates $1,000 in money in the form of bank deposits, and indirectly permits up to $9,000 in additional money to be created through the multiple expansion in bank deposits. d. When the Fed sells government bonds, it will tend to cause a multiple contraction of bank deposits.