The average consumer at a firm with market power has an inverse demand function of P = 10 ? Q. The firm's cost function is C = 2Q. If the firm engages in optimal two-part pricing, it will earn profits of:
A. $32.
B. $2.
C. $64.
D. None of the answers are correct.
Answer: A
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The money multiplier _______
A. increases if banks increase their desired reserve ratio B. increases if the currency drain ratio increases C. is 1 if the desired reserve ratio equals the currency drain ratio D. decreases if banks increase their desired reserve ratio
The long-run aggregate supply will increase when
A) labor supply decreases. B) international trade barriers are removed. C) the price level increases. D) tax rates increase.
Suppose the wage earned by pear pickers suddenly rises. Which of the following effects would we most likely observe as a result?
a. The supply of apple pickers would decrease and the equilibrium wage of apple pickers would decrease. b. The supply of apple pickers would decrease and the equilibrium wage of apple pickers would increase. c. The demand for apple pickers would increase and the equilibrium wage of apple pickers would decrease. d. The demand for apple pickers would decrease and the equilibrium wage of apple pickers would decrease.
Which of the following examples would have an inelastic supply curve?
a. A 3 percent increase in the price of soccer balls results in a 2 percent increase in quantity supplied. b. A 7 percent increase in the price of soccer nets results in a 10 percent increase in quantity supplied. c. A 9 percent increase in the price of soccer uniforms results in a 11 percent increase in quantity supplied. d. A 15 percent increase in the price of soccer shoes results in a 22 percent increase in quantity supplied.