Refer to Figure 5-9. Suppose the government wants to use a Pigovian tax to bring about the efficient level of production. What should the value of the tax be?
A) (P1- P0 ) per unit of output B) P1 per unit of output
C) (P2- P0 ) per unit of output D) (P2- P1 ) per unit of output
C
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
If the required reserve ratio is 10 percent, an increase in bank reserves of $1,000 can support an increase in checking account deposits (including the original deposit) in the banking system as a whole of up to
A) $100. B) $1,000. C) $10,000. D) $100,000.
A monopsonist hires labor in a market with perfectly competitive supply. Whenever she hires an additional worker,
A. she must reduce the wage paid to all workers already hired. B. she will not change the wage paid to all workers already hired. C. she must raise the wage paid to all workers already hired. D. she may or may not choose to change the wage paid to all workers already hired.
You work as a marketing analyst for a pharmaceutical firm, and you are trying to gather information about the marginal cost of production for a competing firm
You know that they have a patent on a popular medication that sells for $20 per dose, and you believe the elasticity of demand for this product is roughly -4. Assuming the competing firm acts as a profit-maximizing monopolist, what is the competing firm's approximate marginal cost of production? A) $10 per dose B) $12.50 per dose C) $15 per dose D) $20 per dose