All other things unchanged, the velocity of money will _______ if the quantity of money demanded _______.
A. decrease; decreases
B. increase; increases
C. increase; decreases
D. fall to zero; increases
Ans: C. increase; decreases
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Ted's Pancake Kitchen suffers a short-run loss. When should Ted decide to shut down rather than continue to produce?
A) if his Kitchen's revenue is less than its fixed costs B) if his Kitchen's revenue is less than its total costs C) if his Kitchen's revenue is less than its variable costs D) if his Kitchen's revenue is less than its explicit costs
Which panel of Figure 3.3 represents the changes in the market for textbooks when the cost of paper decreases and the government increases the number of student loans it grants?
A. A. B. B. C. C. D. D.
When very few substitutes for a good exist, demand will be
A) elastic. B) unit-elastic. C) inelastic. D) perfectly elastic.
Suppose you are a mayor of a city with a police force of 100 and an annual budget of $8 million. Now suppose your police chief asks for an additional officer with an additional annual expenditure of $50,000 for salary, benefits, and equipment. If you are thinking like an economist, you will agree to the request if the chief can demonstrate that
A. the additional officer will produce at least $50,000 worth of extra safety annually. B. the average amount of safety produced per officer is more than $50,000. C. the total amount spent on police protection is worth $8,050,000. D. crime will be reduced.