The classical framework is based on which of the following assumptions?
A) many firms in the economy
B) no single firm can control prices
C) in the long-run the quantity of factors supplied must be equal to the quantity of factors demanded
D) all of the above
E) none of the above
D
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The following table depicts both the product and labor markets for imported coffee. What is the total revenue when 15 workers per day are hired?
A) $5,000 B) $6,750 C) $7,350 D) $7,500
Identify the correct statement regarding a fractional reserve banking system.
a. Only a fraction of the banks in the system are allowed to create money b. Only a fraction of the banks in the system have reserves. c. The claims outstanding against the bank are only a fraction of the bank's total reserves. d. Each bank must deposit a fraction of its reserves with the Federal Reserve Bank. e. Bank reserves represent only a fraction of bank deposits.
Ajax has just discovered that the marginal revenue product generated by the last worker hired was $125 while the marginal factor cost was $85. What should Ajax do?
A) Leave the level of production unchanged. B) Increase the amount produced. C) Reduce the amount produced. D) Collect more information before making a decision.
Gains from trade will be possible as long as
A) people have different endowments. B) people place different values on some goods. C) marginal rates of substitution are equal across individuals. D) excess supply equals excess demand.