Refer to Figure 15.7. Suppose the Federal Reserve buys bonds in the open market. The money supply will ________ and cause a shift from point ________.
A. increase; C to point B
B. decrease; C to point D
C. decrease; B to point C
D. increase; D to point C
Answer: A
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The supply of sand is perfectly inelastic and the demand curve for sand is downward sloping. Hence, if a tax on sand is imposed,
A) sand buyers pay the entire tax. B) sand sellers pay the entire tax. C) the tax is split evenly between the buyers and sellers. D) the government pays the entire tax. E) the government collects no tax revenue because the supply is perfectly inelastic.
In what way can liability rules lead to a more efficient outcome?
What will be an ideal response?
On the graph above, movement from point ________ to point ________ might occur if there is a negative demand shock, followed by updating of expected inflation
A) F; G B) H; I C) H; F D) F; H E) none of the above
Karlos sells his product for $40 each in a competitive price-taker market. At his present rate of output, his marginal cost is $39, average variable cost is $25, and average total cost is $45 . To improve his profit/loss situation, Karlos should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price