If the banking system has a required reserve ratio of 25 percent, then the money multiplier is:
A. 2.
B. 4.
C. 5.
D. 10.
Answer: B
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The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?
A) 6 thousand bottles of wine B) 15 thousand bottles of wine C) 12 tons of rice D) Nothing, it is a free lunch. E) This movement is not possible without economic growth.
If there is a collusive agreement in a duopoly to maximize profit, then the price will
A) equal the marginal cost of production. B) equal the average total cost of production. C) be the same as the price set by a monopoly. D) be the same as the price set by a competitive industry.
Which of the following is a factor of production that generally is fixed in the short run?
A) a factory building B) water C) raw materials D) labor
Suppose that a country is producing on its PPC at a point to the left of the tangency between the trade line and the PPC. At the production point,
A) the opportunity cost in production of the good on the horizontal axis is less than its trade price. B) the opportunity cost in production of the good on the horizontal axis is more than its trade price. C) the opportunity cost in production of the good on the vertical axis is less than its trade price. D) the opportunity cost in production of the good on the horizontal axis may be either less than or more than its trade price. E) the opportunity cost in production of the good on the vertical axis equals its trade price.