The rational outcome of a low-price guarantee policy is that:
A. both firms will sell at the low price.
B. one firm will sell at a low price and the competitor will sell at a high price.
C. both firms will sell at the high price.
D. consumers will be better off.
Answer: C
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Suppose the annual growth rate of real GDP for the nation of Svengali is 5% and the growth rate of velocity is 0%. If the money supply growth rate decreases from 4% to 2%, what is the new rate of inflation in Svengali?
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Which of the following describes a situation in which demand must be inelastic?
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Suppose that production for good X is characterized by the following production function, Q = 4K0.5L0.5, where K is the fixed input in the short run. If the per-unit rental rate of capital, r, is $86.80 and the per-unit wage, w, is $20, then the average total cost of using 25 units of capital and 49 units of labor is:
A. $5.25. B. $31.00. C. $22.50. D. There is insufficient information to determine the average total costs.