Because it is a market economy, in the United States all research and development is done by private business firms
a. True
b. False
Indicate whether the statement is true or false
False
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If the social marginal cost of a good is very high relative to the private marginal cost, then a monopoly will most likely
A) produce more than the social optimum. B) produce less than the social optimum. C) produce the social optimum. D) produce zero pollution.
Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000 and cost an extra $80 per year in lost production. If, in addition, an armored car service is engaged to pick up cash more frequently for a fee of $120 per year, cash holdings will be further reduced to $6,000 per day. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings further to $4,000. If any reduction in cash holdings will be invested in government bonds earning 3 percent, then how much money should Jan's hold?
A. $8,000 B. $4,000 C. $6,000 D. $10,000
The price of mozzarella cheese, which is used in making pizza, increases. In the market for pizza you would expect that
A. the supply of pizza would increase and the price of pizza would decrease. B. the supply of pizza would decrease and the price of pizza would increase. C. the demand for pizza would increase and the price of pizza would increase. D. the demand for pizza would decrease and the price of pizza would fall.
The FOMC is concerned about inflation and has ________ the federal funds rate. Due to substitution effects, other ________ interest rates will ________ almost immediately
A) increased; short-term; increase B) decreased; short-term; decrease C) increased; long-term; increase D) decreased; long-term; decrease E) increased; short-term; decrease