A sudden rise in the market demand in a competitive industry leads to
a. A short run market equilibrium price lower than the original equilibrium
b. A market equilibrium lower than the short run price
c. Some firms exiting the market
d. All of the above
b
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Which of the following best describes an externality?
A) something that is external to the economy B) a sales tax on a good in addition to the market price C) an effect of a transaction felt by someone other than the buyer or seller D) anything produced in other countries E) a change from what is normal
What is the difference between the nominal interest rate and the real interest rate?
What will be an ideal response?
Show that the utility functions V(X,Y) = XaY1-a and U(X,Y) = a ln(X) + (1-a)ln(Y) represent the same ordering of bundles
What will be an ideal response?
How does a bank make most of its profit on its business?
(A) By paying out less in interest on deposits than it earns in interest on loans. (B) By receiving fees from the government for handling federal and state accounts. (C) By collecting fees on safety deposit boxes, travelers' checks, and certified checks. (D) By collecting fees on credit card purchases.