The smaller the currency drain, the
A) smaller the increase in the quantity of money from an increase in reserves.
B) more likely it is that the banking system will hold a larger proportion of excess reserves.
C) the smaller the effect of a change in the discount rate.
D) larger the increase in the quantity of money from an increase in reserves.
Ques. 2The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the
a) percentage change in price.
b) percentage change in quantity demanded.
c) price elasticity of demand.
Ques. 3A monopoly can price discriminate between two groups of consumers if each group has ________.
A) a large consumer surplus
B) a different willingness to pay
C) the same willingness to pay
D) the ability to resell the good to the other group
Ques. 4What is an incentive system?
What will be an ideal response?
Ques. 5Why do firms in an oligopoly find it difficult to cooperate and not cheat on a cartel agreement?
What will be an ideal response?
Ques. 6The above table gives the demand and supply schedules for cat food. If the price is 3.
00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If 3.00 is the equilibrium price, what is the equilibrium quantity?
Ques. 7In the figure above, the difference in wage rate between low-skilled and high-skilled labor is
A) 16.
B) 8.
C) 20.
D) 28.
Ques. 8At the best affordable point, consumers equate their marginal rates of substitution to
A) their money income.
B) their real income.
C) relative prices.
D) relative quantities.
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