If a monopoly firm sells to competitive distributors and the distributors have a constant marginal cost of $5 and they are paying the profit-maximizing wholesale price of $10, what is the retail price of the product?
A) $5 B) $7 C) $15 D) $10
C) $15
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The perfectly competitive firm's supply curve:
A) coincides with its perfectly elastic demand curve. B) is perfectly inelastic at the market price. C) is the firm's marginal cost curve above the minimum point on the AVC curve. D) is the firm's average total cost curve above the shutdown point.
If a bank receives a new deposit of $10,000 . and the legal reserve requirement is 25 percent, then the potential new money that can be created by the banking system, including the initial deposit, is
a. $25,000 b. $2,500 c. $4,000 d. $40,000 e. $10,000
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and monetary base in the context of the Three-Sector-Model? a. The real risk-free interest rate falls and monetary base falls
b. The real risk-free interest rate rises and monetary base falls. c. The real risk-free interest rate and monetary base remain the same. d. The real risk-free interest rate rises and monetary base rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
How are consumers, firms, and investors affected when the U.S. dollar is “weak?” Who benefits and who is harmed?
What will be an ideal response?