A monopolist who is maximizing profits produces to the point at which
A) marginal cost and average total cost are equal.
B) price, marginal cost and average variable cost are equal.
C) price is greater than marginal cost.
D) price is greater than average total cost.
Answer: C
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In the "non-market-clearing model" the level of final goods sales and unemployment during a recession are
A) the result of interactions between supply and demand. B) higher than would be the case in a market clearing model. C) caused by the rapid adjustment of prices and wages. D) the result of wage and price rigidities.
Within certain limits, the reserve requirement for check able deposits are established by
a. Congress. b. the U.S. president. c. each Federal Reserve Bank. d. the Board of Governors.
One reason the Fed tolerates ongoing inflation is because it
a. believes that the CPI understates the actual inflation rate b. believes that the CPI overstates the actual inflation rate c. accepts the idea that a zero inflation rate would make labor markets work more smoothly d. wants to focus more on price stability than on full employment e. is uncertain about the long-run stability of the Phillips curve
What determines the position and shape of a society's production possibilities frontier?
a. the physical resources of that society b. the skills of the workforce c. the level of technology of the society d. the amount of factories in the society e. All of the above are correct.