According to these relationships, the competitive output level arises where
Consider the following model for the production of refined oil: MSC = 10 + 0.5Q; MEC = 0.3Q;
MSB = 30 – 0.3Q; MEB = 0.
a. QC = 25 b. QC = 20 c. QC = 40 d. none of the above
c. QC = 40
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Refer to the scenario above. Which investment option will a risk-seeking individual choose?
A) He will choose to invest in Option A. B) He will choose to invest in Option B. C) He will choose to invest in Option C. D) He will be indifferent in investing in any of the three options.
RBC theorists claim that adverse supply shocks can take forms other than rising raw materials prices. One such shock comes from government policy:
A) reductions in government expenditure. B) increases in tax rates. C) more rigorous environmental regulation. D) reductions in the money growth rate.
The authors open Chapter 17 with a contrast between the Fed's actions in response to the terrorist attacks of September, 2001 and its response to the financial crisis of the Great Depression. Why was the Fed successful at dealing with the crisis in 2001, and not as successful with the crisis of the early 1930s?
What will be an ideal response?
Melita heard that there had been inflation last month. She laughed and did not believe it. When asked why not, she said that last week she spend less at the grocery store because the cost of food had come down. Which of the following is the correct response?
A. Melita is right, all prices must be rising for there to be inflation. B. Melita is right, if food prices are lower, so are all other prices. C. Melita is wrong, food prices are not used to calculate the rate of inflation. D. Melita is wrong, food prices may have fallen, but other prices have risen so the average price of goods is higher.