Rick withdraws $500 from his savings account, keeps $100 as currency, and deposits $400 in his checking account
A. M1 increases by $400 and M2 decreases by $500.
B. M1 does not change, but M2 decreases by $500.
C. M1 does not change, but M2 decreases by $400.
D. M1 increases by $500 and M2 does not change.
D When the $500 was in the savings account, none of it was counted as M1 although all was counted as M2 . When the funds are changed to currency and checkable deposits, all of it becomes part of M1 and hence all of it remains as M2 .
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The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers
When Paul maximizes his profit, the difference between marginal cost and price is A) $0. B) $40. C) $60. D) $30. E) $20.
The simple spending multiplier understates the amount by which output changes
a. True b. False Indicate whether the statement is true or false
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a. opportunity cost must have been excluded from the calculation of marginal cost. b. marginal cost must be falling. c. marginal cost must be rising. d. marginal cost may be rising, falling, or constant.
A perfectly competitive firm will be operating at its shutdown point if it operates
A. at the minimum point on its marginal cost curve. B. at the minimum point on its average variable cost curve. C. at the minimum point on its average total cost curve. D. where P = MC.