There is a 10 percent decrease in the price of plastic used by a firm that make more toys. This causes
A. a decrease in the supply of toys.
B. an increase of the quantity supplied of toys.
C. a decrease in the quantity of toys supplied.
D. an increase in the supply of toys.
Answer: D
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If an indifference curve is a straight line it will not show which of the following?
A) any marginal rate of substitution B) diminishing marginal rate of substitution C) combinations of goods among which a consumer is indifferent D) None of the above answers is correct.
The theory of rational expectations, when applied to financial markets, is known as
A) monetarism. B) the efficient markets hypothesis. C) the theory of strict liability. D) the theory of impossibility.
Each member of the Board of Governors of the Fed: a. is from the minority of the FOMC
b. can have twelve presidential appointments. c. is authorized to set reserve requirements by the Bank Acts of 1933 and 1935. d. serves one nonrenewable term. e. is elected by the member banks which own the Federal Reserve.
A decrease in supply of X increases the equilibrium price of X, which reduces the demand for X and automatically returns the price of X to its initial level.
Answer the following statement true (T) or false (F)