Which of the following statements is NOT true about marginal utility when total utility is at its maximum point?
A. A rational consumer will not consume additional units beyond this point.
B. Marginal utility is decreasing.
C. Marginal utility is negative.
D. Marginal utility is zero.
Answer: C
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Assume that the Paris First National Bank's loan position contracted from $16 million to $12 million. If the required reserve ratio was increased from 20 percent to 40 percent, how much would the money supply shrink?
A. $5 million. B. $10 million. C. $15 million. D. $20 million.
A nondiscriminating profit-maximizing monopolist:
A. will never produce in the output range where marginal revenue is positive. B. will never produce in the output range where demand is inelastic. C. will never produce in the output range where demand is elastic. D. may produce where demand is either elastic or inelastic, depending on the level of production costs.
A 5 percent tax is going to be applied to a $100,000 tax base. What can be said about the revenue collected assuming static tax analysis?
A) The total revenue will be zero. B) The total revenue will be between $0 and $5,000. C) The total revenue will be $5,000. D) There is not enough information to determine what revenues will equal.
If investment demand increases, the equilibrium real interest rate ________ and the equilibrium quantity of investment ________
A) rises; decreases B) falls; decreases C) falls; increases D) rises; increases E) does not change; does not change