There is a positive correlation between a nation's average annual inflation and the degree of independence of its central bank
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose all firms in an industry have a production technology described by the production function 
. The cost of labor is 2 and the cost of capital is 4, and each firm faces a recurring fixed cost of 300.
a. Derive the long run cost and average cost functions for each firm. (Hint: Given the shapes of the isoquants implied by the production function, you should be able to do this without solving a calculus problem.)
b. What is the long run equilibrium output price?
c. How much does each firm produce in long run equilibrium?
d. Suppose market demand is given by 
. How many firms are in the industry in long run equilibrium?
e. Suppose the industry is currently in long run equilibrium. Derive the short run cost function for each firm (assuming labor is variable but capital is fixed in the short run).
f. Now suppose that demand falls to 
. What happens to output price in the short run? What happens to price and the number of firms in the long run?
What will be an ideal response?
Refer to the figure above. What is the opportunity cost of producing one computer program?
A) 0.2 Web sites B) 5 Web sites C) 8 Web sites D) 12 Web sites
A fractional reserve banking system is one in which banks hold less than 100 percent of ________ as reserves
A) shareholder equity B) securities C) deposits D) loans
Suppose Sam's Shoe Co. makes only one kind of shoe, which sells for $50 a pair. If they sold 500,000 pairs of shoes, then their total revenue would be:
A. $25,000,000. B. $10,000. C. $2,500,000. D. Cannot answer this question without knowing the cost per pair.