When a bank makes a loan, the money supply:
A. may increase or decrease depending on how the loan is used.
B. decreases.
C. increases.
D. does not increase.
Answer: C
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In economics, what differentiates the short run from the long run?
What will be an ideal response?
Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and a fungal disease destroys a large portion of the grape harvest of California vineyards
In the market for red wine, these two developments would A) increase demand and decrease supply resulting in a decrease in both the equilibrium quantity and the equilibrium price of red wine. B) increase demand and increase supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of red wine. C) increase demand and decrease supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of red wine. D) increase demand and decrease supply, resulting in an increase in the equilibrium price and an uncertain effect on the equilibrium quantity of red wine.
The average cost for a typical electric-power-production firm is AC = 100 - 10Q + Q2 where Q is measured in billion kilowatt hours per day. At the current regulated price, consumers demand 4 billion kilowatt hours per day
Is this market a natural monopoly? If demand increases to 10 billion kilowatt hours, is this market a natural monopoly? Explain.
Mr. Calhoun owned a worn-out piece of farmland for growing cotton, which he had been unable to rent for years. Suddenly he was getting offers from cotton farmers to lease his land. What is the most likely explanation of this?
A. The price of cotton went down. B. The physical productivity of the land went up. C. Taxes on land went up. D. The price of cotton went up.