After the September 11th attack on the World Trade Center, and with the emergence of the anthrax scare, the price and the purchases of gas masks jumped dramatically in New York City. In the economic way of thinking, which of the following occurred?
A) The supply curve for gas masks shifted to the right.
B) The supply curve for gas masks shifted to the left.
C) The demand curve for gas masks shifted to the right.
D) The demand curve for gas masks shifted to the left.
E) The demand curve for gas masks became upward-sloping.
C
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Use the following graph to answer the next question.
Which of these lines represents the short- run aggregate supply curve?
A. 1 B. 2 C. 3 D. 4
Two firms would sometimes be better off if they got together and agreed to charge a high price, rather than to compete and risk having to charge a lower, competitive price. What is the greatest deterrent to this strategy?
A) One of the firms may decide to lower its price and take business away from the firm that charged the high price. B) The firms may find that the price they charge is greater than the price that would maximize their profits. C) An agreement by firms to charge high prices is illegal. The government can fine the firms and send their managers to jail. D) Consumers may resent having to pay high prices and not buy from either of the firms.
Suppose the First National Bank acquires $500,000 in new deposits and the required reserve ratio is 12 percent. Which of the following is true?
a. Required reserves on the new deposits are $12,000. b. Excess reserves on the new deposits are $500,000. c. Required reserves on the new deposits are $60,000. d. Excess reserves on the new deposits are $12,000. e. Total reserves on the new deposits are $440,000.
Where marginal cost is less than average total cost,
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.