Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a
A) surplus, so the price falls and quantity supplied increases.
B) surplus, so the price rises and quantity demanded increases.
C) shortage, so the price rises and quantity demanded decreases.
D) shortage, so the price falls and quantity demanded increases.
E) surplus, so the price falls and quantity demanded increases.
E
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Refer to Scenario 14-2. As a result of Kristy's deposit, Bank A's required reserves increase by
A) $2,000. B) $8,000. C) $10,000. D) $50,000.
Suppose a U.S. investor buys a Canadian government bond with a face value of Canadian dollar (CAD) 100 and an annual yield of 8.8 percent. Which of the following statements is true?
a. At maturity, the dollar return from the Canadian bond will be $108.8, regardless of what happens to the exchange rate. b. The Canadian bond will yield the same dollar return from the time of purchase to the time of maturity. c. An American will make a profit on the Canadian bond only when the CAD-denominated return is higher on the Canadian bond than the dollar-denominated return on a comparable U.S. bond. d. The dollar return on the Canadian bond depends on the dollar price of the Canadian dollar at the time of maturity. e. The decision to buy the Canadian bond should be based solely on the CAD interest return and not on changes in the exchange rate.
Using hindsight to judge whether buying insurance was a good idea or not:
A. is commonly used by people who wish to buy insurance in the future. B. is the only way to properly measure the true cost of the insurance and its benefit. C. can prove that a good decision at the time was really not worth it. D. is not a good idea; you have to measure the decision considering the information available at the time.
Figure 7.1 shows the U-shaped cost curves for a producer. In the table figure, A is the marginal cost curve, B is the average variable cost curve, and C is the average total cost curve. At an output of 10, the:
a. ?fixed cost equals $10. b. ?total cost equals $10. c. ?fixed cost equals $1. d. ?marginal cost equals $10. e. ?variable cost equals $10.