If a natural monopoly faces a relatively inelastic consumer demand over the range of the production, it will have an incentive to:
A. sell more.
B. advertise more.
C. charge a low price.
D. charge a high price.
Answer: D
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Suppose you are viewing a graph of the total revenue generated from the sale of bananas. On the horizontal axis the numbers indicate the quantity of bananas. On the vertical axis the numbers indicate total revenue. Suppose there are two lines on the graph, A and B, and they only meet when quantity is zero. If, at an output of 10,000 bananas, A lies above B, we can say that
a. A corresponds to more bananas than B b. A represents average revenue at a lower price than B c. A represents marginal revenue at a higher price than B d. A represents total revenue at a higher price than B e. A represents total revenue at a lower price than B
The expected value of a basket with different outcomes is
a. the average of the values of the different outcomes. b. the average of the values of different outcomes multiplied by the average of the probabilities of the outcomes. c. the sum of the values of the different outcomes. d. the sum of the value of each outcome multiplied by its probability.
A television station reports that the price of orange juice has declined but the quantity sold has increased. This situation would be caused by a(n):
a. Increase in demand b. Increase in supply c. Decrease in supply d. Decrease in demand
The reserve ratio is 10 percent. Depositors regularly keep 10 percent of their deposits as cash. If the Fed buys $1 million of U.S. government securities, excess reserves
A. increase by $810,000. B. increase by $900,000. C. increase by $800,000. D. increase by $1 million.