The equilibrium rate of interest in the market for money is determined by the intersection of the
A. supply-of-money curve and the asset-demand-for-money curve.
B. supply-of-money curve and the total-demand-for-money curve.
C. investment-demand curve and the total-demand-for-money curve.
D. supply-of-money curve and the transactions-demand-for-money curve.
Answer: B
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Which statement best describes the relationship between scarcity and shortage?
A) Neither scarcity nor shortages will exist if money prices are allowed to determine who gets what. B) Scarcity and shortages are unavoidable as long as money prices are allowed to determine who gets what. C) Scarcity is an inescapable fact of life but shortages are avoidable. D) Shortages are an inescapable fact of life but scarcity can be eliminated.
Which of the following would cause the present optimal extraction level of a nonrenewable resource to fall?
A. A reduction in extraction costs. B. A reduction in user costs. C. A reduction in total costs. D. A reduction in the price of the resource.
A monopolist finds the price-output combination that maximizes its profits by
A) equating total revenue and total cost. B) equating marginal revenue and marginal cost. C) finding the combination for which the difference between marginal revenue and marginal cost is the greatest. D) equating price and marginal cost.
Statistical data for the 1970s and 1980s suggest that:
A. the Phillips Curve was stable. B. the Phillips Curve was unstable. C. low levels of unemployment were consistently associated with high rates of inflation. D. the inflation rate was highly stable.