The figure illustrates the market for bagels. If the number of bagels is cut from 20 to 10 an hour, the deadweight loss is ________
A) $0.50 a bagel
B) -$5.00 an hour
C) $0 an hour
D) $5.00 an hour
D
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If MUa/Pa = 100/$35 = MUb/Pb = 300/? = MUc/Pc = 400/?, the prices of products b and c in consumer equilibrium:
A) cannot be determined from the information given. B) are $105 and $140 respectively. C) are $105 and $175 respectively. D) are $100 and $200 respectively.
If the Fed wanted to use open market operations to reduce interest rates, it would:
A. buy T-bills from banks. B. sell T-bills to banks. C. issue T-bills on behalf of banks. D. grant banks permission to issue T-bills.
A private good is a good that:
A. is consumed by a single person or household. B. cannot be used by private citizens. C. cannot result in external benefits or costs to those who don't consume. D. is available for everyone to consume, regardless of who pays.
What are the factors that will determine the optimal inflation rate?
What will be an ideal response?