Refer to Figure 18.2. The sale of bonds by the Fed in the open market will result in
A. An increase in the money supply and a move from AS1 to AS2.
B. A decrease in the money supply and a move from AD2 to AD1.
C. An increase in the money supply and a move from AD1 to AD2.
D. A decrease in the money supply and a move from AS2 to AS1.
Answer: B
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Refer to Figure 9.2. At price 0H and quantity Q1, producer surplus is the area
A) 0ABQ1. B) 0EDQ1. C) AHB. D) 0FGQ1. E) none of the above
If the economy experiences a strong boom and consumers' incomes sharply rise, larger, more remote stores with lower prices are ________ to have a(n) ________ in the number of customers.
A) not likely; decrease B) likely; decrease C) not likely; change D) likely; increase
Which of the following statements describes the way our home equilibrium reflects the concepts of competitive markets?
I. The opportunity cost of each good is the inverse of the ratio of labor productivity. II. Prices of each good reflect opportunity cost. III. Wages are equal and reflect the value of the marginal product of labor (MPL × P) for each good. a. I b. II c. III d. I, II, and III
If the average variable cost curve is above the marginal cost curve, then
A. average variable costs must be increasing. B. marginal costs must be increasing. C. marginal costs must be decreasing. D. marginal costs can be either increasing or decreasing.