Which one of the following statements is TRUE?
A) If the money price of a good increases, its relative price necessarily increases.
B) If the money price of a good increases, its relative price necessarily decreases.
C) The relative price of a good refers to the opportunity cost of purchasing it.
D) Rational consumers always ignore the monetary price of a good when deciding whether to buy it.
Answer: C
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An externality is any activity for which an individual firm or consumer does not take into account all
A) of the ramifications of its actions on others. B) associated costs. C) associated benefits. D) associated costs and benefits.
Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1 . If market demand is given by QD = 1050 ? 50P, how much will be produced in the market?
a. 300 b. 400 c. 500 d. 600
A country is experiencing civil unrest. What is likely to happen to the value of its currency?
A. It will stabilize. B. It will increase. C. It will decrease. D. It will not be affected.
The Federal Reserve is powerful because it can influence _______ through its control over _______.
A. the money supply; aggregate demand B. interest rates; aggregate supply C. aggregate demand; the money supply D. aggregate supply; interest rates