If Francisco has been consuming 7 tacos per week at a consumer optimum, and the price of tacos falls, how will Francisco respond?
A. He will buy more tacos.
B. He will save more income.
C. He will buy more of everything.
D. He will buy more of everything except tacos.
Answer: A
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When barriers to entry are high, a monopolist (or cartel) will often be able to increase their profits by
a. expanding their output so they can increase their price. b. reducing their output so they can raise their price. c. expanding their output so they can lower their price. d. reducing their output so they can lower their price.
Exhibit 6-15 Long-run average cost
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Given the short-run average total cost curves in Exhibit 6-15, what level of output per week minimizes average total cost?
A. 500 units. B. 1,000 units. C. 1,500 units. D. 2,000 units.
If not corrected, the financial sector crisis of late 2008 would have tended to
A. increase both Real GDP and the general price level. B. increase Real GDP and lower the general price level. C. lower both Real GDP and the general price level. D. lower Real GDP and increase the general price level.
Given nominal money growth, the amount of seignorage will be greater when
A) tax revenues are higher. B) real money balances are larger. C) the inflation rate is higher. D) foreign lending is higher. E) none of the above