According to the quantity theory of money, a decrease in prices would be due to:
A. a decrease in the money supply.
B. an increase in the money supply.
C. a decrease in the production of output.
D. an increase in the production of output.
A. a decrease in the money supply.
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The SSS Co has a patent on a particular medication. The medication sells for $1 per daily dose and marginal cost is estimated to be a constant at 20ยข
Assuming linear demand and marginal cost curves, use this information to estimate the deadweight loss from monopoly pricing if the firm currently sells 1,000 doses per day. Can this loss be justified?
It's logical, it's a rule of thumb, it's an economic guideline: By producing at a quantity where MR = MC,
a. profit is guaranteed b. profit becomes zero c. the firm incurs a loss d. profit is maximized (or loss minimized) e. the firm should increase quantity
In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a
a. public good. b. societal good. c. private good. d. normal good.
The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.08. The excess reserve ratio, e, is 0.05. What is the size of the money multiplier?
A) 4.70 B) 4.78 C) 4.75 D) 4.00