Related to the Economics in Practice on p. 590: The fact that recessions can be hard to forecast means that the
A. implementation lag is usually short.
B. response lag is nonexistent.
C. recognition lag can be long.
D. recognition lag is usually short.
Answer: C
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Suppose Kaylee withdraws $4,000 from her bank. If the reserve ratio is 25 percent, then this will lead to a decrease in M1 of
A) $1,000. B) $4,000. C) $8,000. D) $12,000.
We say there is productive inefficiency in saving lives if
a. there is some way to save more lives b. there is some way to save more lives without sacrificing any other goods or services c. all resources are devoted to saving lives d. no resources are devoted to saving lives e. anyone dies before reaching his or her life expectancy
A picture-frame company operates in a monopolistically competitive market. Its short- run equilibrium price is $80 and its ATC is $65 . It sells 100 picture frames a week. Ignoring for now its long-run position, in the short run,
a. the firm makes zero economic profit, zero accounting profit, but $1,500 normal profit b. other picture-frame companies will leave the market because it knows new firms will enter to drive price and economic profit down c. the firm makes an $80,000 accounting profit d. the firm makes an economic profit of $1,500 e. the market demand curve will shift to the left as more firms enter the market
If the equilibrium price of widgets is $22, and then a price ceiling of $24 is imposed by the government, as a result,
a. there will be no effect on the widget market.
b. there will be a shortage of widgets
c. there will be a surplus of widgets.
d. the price of widgets will increase.