Which of the following is true of a competitive price-searcher firm when the market is in a long-run equilibrium?
a. MR < MC < price
b. MR < MC = price
c. MR = MC < price
d. MR = MC = price
C
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Suppose that, for every 1 percentage point decline of the discount rate, commercial banks collectively borrow an additional $2 billion from Federal Reserve Banks. Also assume that the reserve requirement is 20%. If the Fed increases the discount rate from 4.0% to 4.25%, bank reserves will ________.
A. increase by $0.75 billion and the money supply will increase by $3.75 billion B. increase by $1 billion and the money supply will increase by $5 billion C. decline by $0.5 billion and the money supply will decline by $2.5 billion D. increase by $0.5 billion and the money supply will increase by $2.5 billion
In the Spence education signaling model, what is the social value of education?
a. Employees improve their ability to perform on the job. b. Employers can use education as a screen to match talented employees with high-skill jobs. c. Employers can save the costs of on-the-job training, which is less efficient than a general education. d. It allows low-ability employees to apply for high-salary jobs.
Amy is thinking about going to the movies tonight. A movie ticket costs $15, and she'll have to cancel a $20 dog-sitting job that she would have been willing to do for free. The opportunity to Amy cost of going to the movies is:
A. $35. B. $20. C. $5. D. $15.
A homeless family is given a government subsidy for an apartment in an affordable housing project. The apartment
A) is not subject to the principle of rival consumption. B) is not a public good. C) has widespread benefits and concentrated costs. D) is subject to the free-rider problem.