The Federal Reserve tends to increase the money supply each year
a. True
b. False
A
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Suppose a farmer in a perfectly competitive agricultural industry rents land that is uniquely productive in the production of a certain crop. In the long run
A) the owner of the land receives economic rent while the farmer earns zero economic profit. B) the owner of the land earns zero economic profit while the farmer receives economic rent. C) both the farmer and the owner of the land receive economic rent. D) neither the farmer nor the owner of the land receive economic rent.
A cafeteria is willing to produce 100 cups of coffee when the price is $1 and 150 cups of coffee when the price is $1.30, other things being equal. The price elasticity of supply of coffee is
A) 1.53. B) 0.67. C) 0.10. D) 0.50.
Suppose a lottery ticket costs $1 and the probability that a holder will win nothing is 99%. What must the jackpot be for this to be a fair bet?
a. 10 b. 100 c. 1,000 d. 10,000
Suppose that an Italian ice cream firm is facing a linear demand curve and that the current price for the Italian ice cream is set at a point where the price elasticity is 1.7. If the firm decreases the product price, the total revenue will:
A. increase if at the new price, the elasticity is still greater than 1. B. increase if at the new price, the elasticity is lower than 1. C. decrease regardless of the size of the price decrease. D. increase regardless of the size of the price decrease.