In a perfectly competitive industry, the firm's marginal revenue curve is
A) downward sloping.
B) upward sloping.
C) vertical.
D) horizontal.
Answer: D
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Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect the:
a. demand for honey to increase. b. demand for honey to decrease. c. quantity demanded of honey to decrease. d. price of honey to decrease. e. quantity demanded of honey to increase.
If a bank had demand deposits of $80 million and it faced a 25 percent required reserve ratio, it would be required to have how many reserves?
a. $20 million b. $40 million c. $60 million d. $80 million
Which of the following is correct?
a. Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage raises the average wage of teenagers by 10 percent. b. The drop in teenage employment caused by a 10 percent increase in the minimum wage is not significant. c. The minimum wage is more often binding for teenagers than for other members of the labor force. d. All firms consistently enforce minimum-wage laws.
If P = domestic prices, P* = foreign prices, and e is the nominal exchange rate, which of the following is implied by purchasing-power parity?
a. P = e/P b. 1 = e/P c. e = P/P d. None of the above is correct.