Consumer equilibrium exists when:
a. the marginal utility of each good and service consumed is equal.
b. the total utility of each good and service consumed is equal.
c. the marginal utility of each good and service consumed equals its price.
d. ratio of marginal utility to price for all goods and services is equal.
d
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A single firm in a contestable market is limited in the amount of economic profit it can earn because there
A) are barriers to entry. B) are no barriers to entry. C) is collusion. D) are government regulations limiting its profit.
Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down
a. True b. False Indicate whether the statement is true or false
Assume the required reserve ratio is 10 percent and the FOMC orders an open market sale of $50 million in government securities from member banks. If the oversimplified money multiplier is assumed, then the money supply will
a. increase by $500 million. b. increase by $100 million. c. decrease by $100 million. d. decrease by $500 million.
The distinction between supply and the quantity supplied is best made by saying that:
A. the quantity supplied is represented graphically by a curve and supply as a point on that curve. B. the quantity supplied is in an inverse relation with prices, whereas supply is in a direct relation. C. the quantity supplied is in a direct relation with prices, whereas supply is in an inverse relation. D. supply is represented graphically by a curve and quantity supplied as a point on that curve.