When we assume that consumers want to pay the lowest price possible, we assume that consumers are:
A. deceitful.
B. rational.
C. cheap.
D. informed.
Answer: B
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Refer to Table 4-3. The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. If the market price of cowboy hats is $50, how many hats will be produced?
A) 0 B) 1 C) 2 D) 4
Government picking winners
A) is the market model. B) is the central planning model. C) can be done with really good data. D) none of these choices.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. Two possible consumption bundles that Country A could produce are:
A. (5,000 bananas, 1,000 tomatoes) and (1,000 bananas, 5,000 tomatoes) B. (2,500 bananas, 500 tomatoes) and (1,250 bananas, 800 tomatoes) C. (5,000 bananas, 0 tomatoes) and (2,500 bananas, 500 tomatoes) D. (2,500 bananas, 750 tomatoes) and (1,250 bananas, 750 tomatoes)
Answer the following questions true (T) or false (F)
1. The Fed can simultaneously reduce the inflation rate and stimulate growth through lowering interest rates. 2. A monetary policy target is a variable that the Fed can affect directly, which then affects one or more of the Fed's policy goals. 3. Ceteris paribus, an increase in the money supply will lower short-term interest rates.