A reserve requirement of 25 percent would mean that each dollar of reserves could support ____ of demand deposits
a. $0.25
b. $0.75
c. $1.33
d. $4.00
d
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An increase in supply will cause equilibrium price to __________ and equilibrium quantity to __________
a. increase; increase b. increase; decrease c. decrease; increase d. decrease; decrease e. remain constant; increase
If the average total cost curve is always above the demand curve for a monopolist:
a. the profits of the monopolist will be large. b. the monopolist must be producing inefficiently. c. the monopolist will suffer economic losses. d. entry will occur, forcing the monopolist to reduce price and expand output.
If the tax revenue of the federal government exceeds spending, then the government necessarily
A. runs a budget deficit. B. runs a budget surplus. C. runs a national debt. D. will increase taxes.
Judy is planning to sell an antique grandfather clock that she values at $200. If she sells the clock on Craigslist, it will be bought by someone who values it at $450. If she uses an antique dealer to sell the clock, it will be bought by someone who values it at $850. The antique dealer will charge Judy $100 to sell the clock, which just covers the antique dealer's opportunity cost of selling the clock. Relative to selling the clock on Craigslist, selling the clock through an antique dealer will lead:
A. to no change in total economic surplus. B. total economic surplus to increase by $400. C. total economic surplus to increase by $300. D. total economic surplus to decrease by $100.