If a variable input is added to some fixed input, beyond some point the resulting extra output will decline. This statement describes:
A. economies and diseconomies of scale.
B. X-inefficiency.
C. the law of diminishing returns.
D. the law of diminishing marginal utility.
Answer: C
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
If bank reserves are 200, the public holds 400 in currency, and the desired reserve/deposit ratio is 0.20, the deposits are ________ and the money supply is ________.
A. 400; 800 B. 200; 600 C. 600; 1,000 D. 1,000; 1,400
The FDIC handles most bank failures by the purchase and assumption method because
A) the existence of uninsured deposits (over $100,000 ) makes runs and panics possible. B) it allows the FDIC to avoid paying off large deposits when a bank fails. C) most banks have become too big for the FDIC to allow them to fail. D) it allows the FDIC to write checks legally to pay all deposits, even those over $100,000.
Perfect substitutes will have indifference curves that are:
a. concave b. convex c. straight lines d. L-shaped e. none of the above