Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. Equilibrium income is
A) 40. B) 50. C) 250. D) 400.
C
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Assume the desired reserve ratio is 10 percent, banks loan all excess reserves and the currency drain is zero. If the Fed sells $100 million of U.S. government securities to Boise Bank, the monetary base increases by
A) $1 million. B) $10 million. C) $100 million. D) $1,000 million. E) $90 million.
In the scenario above, as a result of increased advertising, Talbot's economic profit
A) decreases by $500. B) increases by $170. C) increases by $750. D) decreases by $100.
An increase in price will result in an increase in total revenue if demand is:
A) perfectly elastic. B) relatively elastic. C) inelastic. D) unit elastic.
In the figure above, the wage rate is $600 and total fixed cost is $15,000. When there are 40 workers, what is average variable cost?
A. $12.00 B. $5.00 C. $6.00 D. $4.10 E. $0.23