A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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Underproduction compared to the efficient amount implies that for the last unit produced
A) marginal social benefit exceeds marginal social cost. B) marginal social benefit equals marginal social cost. C) marginal social cost exceeds marginal social benefit. D) the deadweight loss is zero.
Assuming initially that the required reserve ratio = 10%, the currency-deposit ratio = 75%, and the excess reserve ratio = 156%, an increase in the excess reserve ratio to 200% causes the M1 money multiplier to ________, everything else held constant
. A) increase from 0.15 to 0.33 B) decrease from 0.73 to 0.61 C) increase from 0.54 to 0.67 D) decrease from 1.67 to 1.54
If a firm adopts a labor-saving piece of technology, it will:
A. increase the marginal product of labor. B. decrease the marginal product of labor. C. increase the marginal supply of labor. D. decrease the marginal supply of labor.
Diane's Auto World installs tires on automobiles, light trucks, and sport utility vehicles. She is a profit-maximizing business owner whose firm operates in a competitive market. The marginal cost of installing a tire is $20 . The marginal productivity of the last worker that Diane hired was 2 tires per hour. What is the maximum hourly wage that Diane was willing to pay the last worker hired?
a. $10 b. $20 c. $40 d. There is insufficient information to answer this question.