Which of the following is a typical example of monopolistic competition?
a. a wheat farm
b. a chain restaurant
c. an apple orchard
d. an herb grower
b. a chain restaurant
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Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. A bundle of goods that Country B could potentially make would be:
A. (400 iPods, 2,000 tablets). B. (200 iPods, 1,500 tablets). C. (300 iPods, 450 tablets). D. (400 iPods, 1 tablet).
QN=65 (17767) Suppose there are only two firms in an economy: Cowhide, Inc. produces leather and sells it to Couches, Inc., which produces and sells leather furniture. With each $1,000 of leather that it buys from Cowhide, Inc., Couches, Inc. produces a couch and sells it for $3,000. Neither firm had any inventory at the beginning of 2009. During that year, Cowhide produced enough leather for 20 couches. Couches, Inc. bought 80% of that leather for $16,000 and promised to buy the remaining 20% for $4,000 in 2010. What was the economy's GDP for the 2009?
a. $48,000 b. $52,000 c. $64,000 d. $68,000
The official policy of Lolita’s government is that while some consumption is good, a significant percentage of a person’s earnings should be saved. Why is this policy good for economic growth?
a. It prevents money from leaving the country. b. It reduces consumption of scarce natural resources. c. Saving is a form of human capital. d. Saving leads to more investment and capital formation.
If reserves in the banking system increase by $100, then checkable deposits will increase by $1000 in the simple model of deposit creation when the required reserve ratio is
A) 0.01. B) 0.10. C) 0.05. D) 0.20.