If the required reserve ratio is 10 percent, an increase in bank reserves of $1,000 can support an increase in checking account deposits (including the original deposit) in the banking system as a whole of up to
A) $100. B) $1,000. C) $10,000. D) $100,000.
C
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Political candidates often hold fundraisers by charging "per plate" for dinner. Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate. Does this transaction benefit both parties?
A) Yes, but only if the dinners served actually cost $1,000 each. B) Yes, it was a voluntary exchange that benefited both parties. C) No, political candidates should never be allowed to overcharge for a fundraising dinner as that limits the number of people who can afford to attend. D) No, Wendy paid too much for four dinners.
Constant returns to scale means that long-run:
A. ATC does not change as output increases. B. ATC rises and then falls as output increases. C. ATC decreases as output decreases. D. ATC increases as output increases.
If fixed cost is $200,000 and variable cost is $30 per unit over the relevant range of output, when 10,000 units are produced, the average total cost will be:
A. $20. B. $30. C. $50. D. $70.
The production possibilities frontier in Figure 3-1, using a move from point B to point D as an example, shows
A. a constant slope. B. the principle of comparative advantage. C. the principle of increasing costs. D. an inefficient allocation of resources.