When nominal interest rates increase, the opportunity cost of holding money will ________, and the quantity of money demanded by households and firms will ________
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
B
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A demand curve that is perfectly horizontal is
A. perfectly elastic. B. perfectly inelastic. C. relatively elastic. D. relatively inelastic.
Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. At a quantity of 4,000 pounds
A) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently low. B) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high. C) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low. D) producers should raise the price to $9 in order to sell the quantity demanded of 4,000.
In this consumer and producer surplus graph, what happens at equilibrium (E)?
a. MB = MC
b. MB < MC
c. MB > MC
d. MB + MC = 0
Greater-than-normal profit represents
A. Explicit costs minus implicit costs. B. Below-average returns to capital. C. Payment for entrepreneurship. D. Exploitation of workers.