People choose to hold a larger quantity of money if
a. the interest rate rises, which causes the opportunity cost of holding money to rise.
b. the interest rate falls, which causes the opportunity cost of holding money to rise.
c. the interest rate rises, which causes the opportunity cost of holding money to fall.
d. the interest rate falls, which causes the opportunity cost of holding money to fall.
Answer: d. the interest rate falls, which causes the opportunity cost of holding money to fall.
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The supply of sand is perfectly inelastic and the demand curve for sand is downward sloping. Hence, if a tax on sand is imposed,
A) sand buyers pay the entire tax. B) sand sellers pay the entire tax. C) the tax is split evenly between the buyers and sellers. D) the government pays the entire tax. E) the government collects no tax revenue because the supply is perfectly inelastic.
The table above shows sales of the firms in the chocolate industry. The four-firm concentration ratio in the industry is
A) 52 percent. B) 65 percent. C) 72 percent. D) 80 percent.
In the short run, changes in output can only be brought about by a change in the quantity of variable inputs
Indicate whether the statement is true or false
If a firm increases its output and finds that its average total cost decreases as a result, this implies that
a. marginal cost exceeds average total cost. b. the cost of producing an additional unit of output is more than the average total cost. c. average fixed cost is increasing. d. average total cost exceeds marginal cost.