Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:
a. decrease the demand for chicken creating a lower price and a smaller amount of chicken purchased in the market.
b. decrease the supply of chicken creating a higher price and a smaller amount of chicken purchased in the market.
c. increase the demand for chicken creating a higher price and a greater amount of chicken purchased in the market.
d. increase the supply of chicken creating a lower price and a greater amount of chicken purchased in the market.
c
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An increase in the currency drain ratio ________
A) decreases the size of the money multiplier B) increases the size of the money multiplier C) increases the deposits in all banks D) decreases the size of the monetary base E) increases the size of the monetary base
The above figure illustrates a perfectly competitive firm. If the market price is $40 a unit, to maximize its profit (or minimize its loss) the firm should
A) shut down. B) produce more than 10 and less than 30 units. C) produce 30 units. D) produce more than 30 units and less than 40 units.. E) produce 40 units.
Since firms within a monopolistically competitive industry set output where marginal revenue is equal to marginal cost, the size of the fixed entry cost does not impact the equilibrium price.
Answer the following statement true (T) or false (F)
In the dynamic aggregated demand and aggregate supply model, inflation occurs if
A) SRAS shifts faster than AD. B) AD shifts slower than SRAS. C) LRAS shifts faster than AD. D) AD shifts faster than SRAS.