If an economy has a velocity of circulation of 3, then
A) the quantity of money is 3 times real GDP.
B) in a year the average dollar is exchanged 3 times to purchase goods and services in GDP.
C) nominal GDP is 1/3 the size of the quantity of money.
D) the quantity of money is 3 for every dollar of GDP.
Ques. 2Robinson spends all his income on mangos and bananas. Mangos cost 3 per pound and bananas cost 1 per pound. The marginal utility is 30 for the last pound of mangos purchased and 8 for the last pound of bananas.
To maximize his utility, Robinson should buy A) more mangos and fewer bananas.
B) more bananas and fewer mangos.
C) the present combination of goods.
D) only bananas.
Ques. 3A normal good is defined as a good for which the demand curve
A) shifts leftward as income increases.
B) shifts rightward as income increases.
C) slopes downward to the right.
D) is perfectly price elastic.
Ques. 4Sam's Scarves has 2 knitting machines and employs 2 people. They produce 15 scarves a day. If the firm hires an additional person, the 3 workers can produce 19 scarves a day other things remaining the same.
The market for scarves is perfectly competitive and the price of a scarf is 20. The value of marginal product of the third worker is ________. A) 80
B) 300
C) 380
D) 4 scarves
Ques. 5The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month, the deadweight loss is
A) zero.
B) 7.5 million.
C) 15 million.
D) 10 million
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