If the demand for its product is inelastic, a monopoly's
A) total revenue increases when the firm lowers its price.
B) total revenue is unchanged when the firm lowers its price.
C) marginal revenue is negative.
D) marginal revenue is equal to zero.
C
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A bank can legally hold reserves as: a. gold and coins
b. gold and checks. c. cash in its vault and non-interest-bearing reserve deposits at the Fed. d. gold and non-interest-bearing reserve deposits at the Fed. e. U.S. government securities and coins.
Moral hazard occurs when
a. an employer closely monitors an employee. b. two people consider a trade with each other and one person has relevant information about some aspect of the product's quality that the other person lacks. c. an employee lacks an incentive to promote the best interests of the employer, and the employer cannot observe the actions of the employee. d. an employee closely monitors the actions of her employer.
If a chef and her equipment transform $50 worth of raw foodstuff into a meal with a total value of $150, the resulting output would be
A. measured as the $150 total value. B. measured as the $100 of value added. C. referred to as an intermediate product. D. measured as $200 of value added.
Several houses built in a country during a certain year got damaged due to an earthquake. Which of the following is likely to happen due to this damage?
A) The country's GDP will remain unchanged. B) The trade surplus of the country will increase. C) The country's GDP will decrease. D) The trade deficit of the country will increase.