An increase in ________ decreases the quantity of money people want to hold.

An increase in ________ decreases the quantity of money people want to hold.
 
  A) the price level
  B) real GDP
  C) the interest rate
  D) the quantity of money

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Ques. 2

Which of the following episodes would most likely contain an externality?
 
  A) You cannot afford to buy groceries.
  B) You decide to grow your own vegetables in your backyard where no one else can see them.
  C) You decide to grow flowers in your front yard where everyone else can see them.
  D) You eat all the vegetables you grow yourself.

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Ques. 3

Pam buys only thread and fabric, and she buys the quantities that maximize her utility. Her marginal utility from a spool of thread is 30 units and her marginal utility from a yard of fabric is 60 units.
 
  If the price of a spool of thread is 4, then you are sure that the price of a yard of fabric is ________. A) 4
  B) 2
  C) 8
  D) 12

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Ques. 4

Product differentiation exists within an industry if
 
  A) there are no substitutes for a product.
  B) there are close but not perfect substitutes for a product.
  C) the firm can sell all it wants at the chosen price.
  D) there is a monopoly.

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Ques. 5

Which of the following is TRUE of a monopoly?
 
  A) It can always increase its revenue by increasing the price to its customers.
  B) It will always operate somewhere along the inelastic portion of the demand curve.
  C) Its marginal cost curve is always downward sloping.
  D) None of the above is correct.

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Ques. 6

When the marginal product of labor is greater than the average product of labor, the
 
  A) marginal product of labor must be increasing as labor increases.
  B) average product of labor must be increasing as labor increases.
  C) total product must be increasing at an increasing rate as labor increases.
  D) None of the above answers is correct.