“As long as total revenue slopes up, marginal revenue must slope up also.” Explain whether this statement is true or false.
What will be an ideal response?
Marginal revenue is the slope of total revenue. Marginal revenue typically slopes down, since total revenue typically increases, but at a decreasing rate.
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In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase by
A) $10. B) $100. C) $100 times the reciprocal of the required reserve ratio. D) $100 times the required reserve ratio.
The stock of high-powered money in the economy is $80 billion. The bank reserve-holding ratio is 0.12 and the public wishes to hold 10% of its deposits as cash. The money supply will be approximately
A) $363 billion assuming the 80 billion of high-powered money is held by banks. B) $400 billion assuming the 80 billion of high-powered money is held by the Fed or in bank vaults. C) $327 billion assuming the 80 billion of high-powered money is not held by the Fed or in bank vaults. D) $425 billion assuming the 80 billion of high-powered money is held by banks.
In the long run, the price for a perfectly competitive firm
A) will be determined by the firm's supply and demand curves. B) will allow for positive economic profits. C) will equal marginal cost where marginal cost is at a minimum. D) will equal the minimum average total cost.
If the U.S. Gini coefficient increased from 0.4 in 1970 to 0.6 in 1990, what would be most accurate?
a. Income inequality increased in the U.S b. Per capita income increased in the U.S c. Both income inequality and per capita income increased d. Income inequality decreased e. The growth rate of income increased