If the price of suntan lotion increases from 6 to 8 per bottle and quantity demanded decreases from 900,000 bottles to 845,000 bottles, using the midpoint method, what is the price elasticity of demand for suntan lotion?
What will be an ideal response?
Ques. 2Jake opens a pig farm in Idaho. To start his farm, he uses his entire 50,000 of savings from his savings account. The bank was paying him 2,500 interest on his saving. Explain why the 2,500 is one of Jake's costs.
What will be an ideal response?
Ques. 3In the figure above, the quantity of low-skilled labor employed is
A) 2,000 hours per day.
B) 4,000 hours per day.
C) 5,000 hours per day.
D) 7,000 hours per day.
Ques. 4Larry consumes at a point on his budget line where his marginal rate of substitution is less than the magnitude of the slope of his budget line. As Larry moves toward his consumer equilibrium point, he will move to a
A) lower budget line.
B) higher budget line.
C) lower indifference curve.
D) higher indifference curve.
Ques. 5In the economy of Brightland, the commercial banks have deposits of 600 billion. Their reserves are 60 billion. All reserves are in deposits with the Central Bank and the commercial banks hold no excess reserves.
There is 120 billion in Central Bank notes outside the banks, and there are no coins. a) What is the economy's monetary base? b) What is the quantity of money in the economy? c) Calculate the money multiplier. d) Suppose the Central Bank of Brightland undertakes an open market purchase of securities of so that the monetary base increases by 5 billion. By how much will the quantity of money change?
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