Prices play a role in a market
A. because they help eliminate poverty.
B. because they distribute scarce goods to those consumers who value them most highly.
C. because they eliminate scarcity.
D. because when prices are in equilibrium, product shortages or surpluses can occur.
Answer: B
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When the price of a product increases, the marginal revenue product curve in a perfectly competitive market
A) does not change. B) becomes flatter. C) shifts to the right. D) shifts to the left.
Refer to Table 9-5. The required reserve ratio is 10%. What is the maximum amount of new loans that Bolton bank can create and by how much can Bolton initially increase the money supply, assuming that newly created deposits are transferred to another bank?
A) $30 million; $30 million B) $70 million; $30 million C) $70 million; $70 million D) $70 million; $700 million
The special demand structure that induces a firm to use a cross-subsidization strategy is:
A. imperfect substitution among products. B. independent demand for products. C. interdependent demand for products. D. perfect substitution among products.
Which of the following supports the classical theory of employment?
A. The interest rate will not always equalize savings and investment. B. Not everything produced will necessarily be purchased. C. Saving and investing are done by different people for different reasons. D. Wages and prices are flexible downwards.