A move from F to G represents
A. an increase in quantity supplied.
B. a decrease in quantity supplied.
C. an increase in supply.
D. a decrease in supply.
C. an increase in supply.
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The first term in an NPV calculation is usually
A) positive, because firms consider only positive returns. B) positive, because interest charges do not accrue until the second period. C) zero, because interest charges do not accrue until the second period. D) negative, because funds for the project have to be borrowed up front before it is begun. E) negative, because the cost of the project is immediate, but revenue streams from the project come later.
Graphically, the area that represents the difference between the market price and the minimum price required to induce suppliers to produce a good is called
a. consumer surplus. b. producer surplus. c. marginal cost. d. triangular arbitrage.
If there is an adverse supply shock and the Federal Reserve responds by increasing the growth rate of the money supply, then in the short run the Federal Reserve's action
a. lowers both inflation and unemployment. b. lowers inflation but raises unemployment. c. raises inflation but lowers unemployment. d. raises both inflation and unemployment.
What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?
A) output effect = $1.50; price effect = $2.00
B) output effect = $5.50; price effect = -$2.00
C) output effect = $3.00; price effect = $0.50
D) output effect = $4.00; price effect = -$0.50