The price elasticity of demand for lettuce has been estimated to be 2.58. If an insect infestation destroys 10% of the nation's lettuce crop, how will that affect total revenue from lettuce, all other things unchanged?
A. Average costs will increase
B. The average product will fall
C. Average total costs will fall
D. Total revenue will fall
Answer: D. Total revenue will fall
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"Lender of last resort" means that the central bank
a. has to lend money to failing banks. b. should lend money to individuals if their bankruptcy would threaten the banking system. c. should lend money to banks that are suffering short-term liquidity shortages. d. should lend money to pay for government deficits. e. None of the above
Takeover bids (and the potential for such bids)
a. increase the incentive of corporate managers to perform efficiently. b. increase the likelihood that managers will be able to gain at the expense of stockholders. c. are more likely to occur when a company is producing efficiently and operating profitably. d. serve no useful economic purpose.
Available evidence indicates that stock prices, even if not exactly a random walk, are very close to a random walk
a. True b. False Indicate whether the statement is true or false
Refer to Figure 14.2. A movement from point c to point b could be caused by a simultaneous ________ and ________.
A. decrease in government spending; decrease in the price of oil B. decrease in taxes; increase in the price of oil C. increase in taxes; decrease in government spending D. increase in government spending; increase in the money supply