Suppose the U.S. money supply increases from $7.6 trillion to $8.3 trillion. If there is zero real economic growth, and velocity stays constant, then according to the quantity theory of money, the U.S. inflation rate during this period would be:
A. 6 percent.
B. 3 percent.
C. 9 percent.
D. 12 percent.
Answer: C
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Since people's incomes are limited and their abilities to borrow differ they face _____ constraints
a. psychological b. financial c. societal d. contractual
If the social value of producing a good is always higher than the private value of producing it, then there is a
a. negative externality associated with the production of the good, and the market equilibrium quantity of the good is less than the socially optimal quantity. b. negative externality associated with the production of the good, and the socially optimal quantity of the good is less than the market equilibrium quantity. c. positive externality associated with the production of the good, and the market equilibrium quantity of the good is less than the socially optimal quantity. d. positive externality associated with the production of the good, and the socially optimal quantity of the good is less than the market equilibrium quantity.
Suppose a monopolist produces two different products. If the marginal cost of producing one is lower than the marginal cost of producing the other, and the monopolist charges a different price for the two goods, then the monopolist is:
A. not maximizing its profit. B. not price discriminating. C. perfectly price discriminating. D. imperfectly price discriminating.
In 2009 the electronics retailer Circuit City closed its stores. If we assume this was a short-run decision, the most likely explanation for it is that the price of a typical product sold at Circuit City stores was:
A. greater than the average total cost of producing its typical product. B. equal to the average total cost of producing its typical product. C. less than the average total cost of producing its typical product but greater than the average variable cost. D. less than the average variable cost of producing its typical product.