Mergers can sometimes be good for a market by allowing firms to take advantage of economies of scale.
Answer the following statement true (T) or false (F)
True
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Assuming that the government can act immediately before the multiplier takes effect, then to offset an increase in investment by $1 billion, government purchases must be:
A. decreased by $2 billion. B. increased by $1 billion. C. decreased by $1 billion. D. decreased by $0.5 billion.
The precautionary demand for holding money arises because
A) people want be able to make unexpected purchases or to meet emergencies. B) credit cards charge low interest rates, which makes money more attractive than credit. C) expected transactions are completed more easily with debit cards than with credit cards. D) people would rather hold money in the form of time deposits than in the form of hard currency.
In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market. Use both diagrams to answer the following question: In Figure 23.3, if market demand is at D1, the firm should
A. Produce q1. B. Leave the market. C. Shut down. D. Do any of the above depending on the position of the AVC and the length of the time period.
Refer to the below graph of the market for wheat. The government adopts a price support program for wheat, and supports the wheat price at P2. The area of Q1ABQ2 would measure the:
A. Total amount received by farmers from selling wheat
B. Total profits of wheat farmers
C. Amount government will pay to wheat farmers
D. Amount buyers of wheat will pay to wheat farmers