Suppose that Gigantic Company is increasing in size. As Gigantic Company grows, demand for inputs causes input prices to rise. It is likely that continued growth will result in:
A. economies of scale.
B. reduced fixed costs.
C. diseconomies of scale.
D. increasing marginal returns.
Answer: C
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Refer to Figure 7-1. At the market equilibrium
A) the marginal benefit is less than the marginal cost. B) the marginal benefit is greater than the marginal cost. C) the marginal benefit is equal to the marginal cost. D) the marginal benefit is zero.
Suppose the Chinese central bank wants to keep the exchange rate of its currency value constant over time. An increase in the demand for Chinese goods by American residents will lead the Chinese central bank to
A) coordinate with the U.S. central bank in order to increase the supply of the U.S. dollar in the foreign exchange market. B) increase the demand for the Chinese currency in the foreign exchange market. C) use its dollar reserves to buy the Chinese currency in the foreign exchange market. D) sell the Chinese currency in exchange for U.S. dollars in the foreign exchange market.
The Federal Open Market Committee is important because
a. its deliberations are extremely private b. it sets the course for the nation's money supply c. it is composed of people who are most knowledgeable about the economy d. it discusses unemployment and inflation e. of its influence on fiscal policy
What are the main features of the Robinson-Patman Act?
What will be an ideal response?