Suppose that the development of a new type of circuit lowers the costs of production in the microcomputer industry, which is perfectly competitive. The long-run effect will likely be
a. lower price and larger output
b. lower price and smaller output
c. higher price and larger output
d. higher price and smaller output
e. no change in price or output
A
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The imposition of a sales tax on eggs will:
a. Cause a parallel shift downward in demand for eggs. b. Cause a parallel shift upward in demand for eggs. c. Lead to an increase in the slope of the demand curve for eggs. d. Have no effect in demand or sales of eggs since they are a small part of any family's budget.
The rate at which one good can be converted technologically into another is called
A) the marginal rate of transformation. B) the marginal rate of substitution. C) the marginal product of labor. D) the rate of conversion.
The key to diversification is that the risks should be:
A. positively correlated. B. uncorrelated. C. negatively correlated. D. easy to reduce.
Assume total reserves are $1 million, check able deposits are $5 million, and the reserve requirement is 10 percent. What are the excess reserves?
a. $4 million b. $6 million c. $1 million d. $500,000