In an economy in which real output grows at an average rate of 3 percent per year, a 7 percent average rate of growth in the money supply would result in
a. an inflation rate of 4 percent, if velocity were constant.
b. an inflation rate of -4 percent, if velocity were constant.
c. a $4 increase in the price level per year.
d. a $4 decrease in the price level per year.
A
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The figure above shows the demand and marginal revenue curves facing Sue's Surfboards, the sole renter of surfboards on Big Wave Island. If Sue is renting 25 surfboards an hour so that the marginal revenue is negative, then Sue's Surfboards
A) can increase its profit by increasing the number of rentals. B) must face an inelastic demand for surfboard rentals. C) must face a unit elastic demand for surfboard rentals. D) must face an elastic demand for surfboard rentals.
Meat at the supermarket has contributed to increase in food prices in 2010, and high feed and fuel prices mean that steak will likely cost a lot more this fall. The price of feed has increased 50 percent and hay has doubled from two years ago
Based on this information, which of the following is TRUE in the market for beef? A) Consumer surplus will decrease. B) Producer surplus will increase. C) Equilibrium price will decrease. D) Equilibrium quantity will increase.
The government component (G) of total output includes goods and services purchased by
a. the federal government plus transfer payments. b. all government institutions plus transfer payments. c. all government institutions. d. all government institutions plus tax revenues.
Describe the three main categories of firms
What will be an ideal response?