71) If there is no scarcity, A) the opportunity cost of an action would be greater than its sunk cost. B) an action would have zero opportunity cost. C) choices are no longer rational. D) marginal cost of an action is greater than its marginal benefit. E) all marginal benefits would equal zero.   72) The benefit of an activity is A) purely […]

    32) Bill owns a lawn-care company in Windermere, Florida, whose cost curves are illustrated in the above figure. The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed. At this price, how many lawns will Bill mow per week? A) more than 10 and less than 30 B) 30 C) 40 D) 50 E) 0   33) Bill owns […]

  71.Ifpeopledecidetoholdmorecurrencyrelativetodeposits,themoneysupply a.falls.Thelargerthereserveratiois,themorethemoneysupplyfalls. b.falls.Thelargerthereserveratiois,thelessthemoneysupplyfalls. c.rises.Thelargerthereserveratiois,themorethemoneysupplyrises. d.rises.Thelargerthereserveratiois,thelessthemoneysupplyrises. 72.Supposethatinacountrypeoplegainmoreconfidenceinthebankingsystemandsoholdrelativelylesscurrencyandmoredeposits.Asaresult,bankreserveswill a.decreaseandthemoneysupplywilleventuallydecrease. b.decreaseandthemoneysupplywilleventuallyincrease. c.increaseandthemoneysupplywilleventuallydecrease. d.increaseandthemoneysupplywilleventuallyincrease. 73.Ifpeopledecidetoholdmorecurrencyrelativetodeposits,themoneysupply a.falls.TheFedcouldlessentheimpactofthisbybuyingTreasurybonds. b.falls.TheFedcouldlessentheimpactofthisbysellingTreasurybonds. c.rises.TheFedcouldlessentheimpactofthisbybuyingTreasurybonds. d.rises.TheFedcouldlessentheimpactofthebysellingTreasurybonds. 74.Ifpeopledecidetoholdlesscurrencyrelativetodeposits,themoneysupply a.falls.TheFedcouldlessentheimpactofthisbybuyingTreasurybonds. b.falls.TheFedcouldlessentheimpactofthisbysellingTreasurybonds. c.rises.TheFedcouldlessentheimpactofthisbybuyingTreasurybonds. d.rises.TheFedcouldlessentheimpactofthisbysellingTreasurybonds. 75.Duringwarsthepublictendstoholdrelativelymorecurrencyandrelativelyfewerdeposits.Thisdecisionmakesreserves a.andthemoneysupplyincrease. b.andthemoneysupplydecrease. c.increase,butleavesthemoneysupplyunchanged. d.decrease,butleavesthemoneysupplyunchanged. 76.Duringrecessions,bankstypicallychoosetoholdmoreexcessreservesrelativetotheirdeposits.Thisaction a.increasesthemoneymultiplierandincreasesthemoneysupply. b.decreasesthemoneymultiplieranddecreasesthemoneysupply. c.doesnotchangethemoneymultiplier,butincreasesthemoneysupply. d.doesnotchangethemoneymultiplier,butdecreasesthemoneysupply. 77.Peoplehold$400millionofbankdepositsbutnocurrency.Bankshavemade$380milliondollarsofloansandonlyholdenoughreservestosatisfyreserverequirements.Becauseofuncertainty,bankschoosetohold$10millionmoreinreserves.TheFedtakesnoaction.Whathappenstobankloans? a.theyfall$220million b.theyfall$200million c.theyrise $200 million d.theyrise $220 million 78.Supposebanksdecidetoholdmoreexcessreservesrelativetodeposits.Otherthingsthesame,thisactionwillcausethe a.moneysupplytofall.ToreducetheimpactofthistheFedcouldsellTreasurybonds. b.moneysupplytofall.ToreducetheimpactofthistheFedcouldbuyTreasurybonds. c.moneysupplytorise.ToreducetheimpactofthistheFedcouldsellTreasurybonds. d.moneysupplytorise.ToreducetheimpactofthistheFedcouldbuyTreasurybonds. 79.Supposebanksdecidetoholdfewerexcessreservesrelativetodeposits.Otherthingsthesame,thisactionwillcausethe a.moneysupplytofall.ToreducetheimpactofthistheFedcouldsellTreasurybonds. b.moneysupplytofall.ToreducetheimpactofthistheFedcouldbuyTreasurybonds. c.moneysupplytorise.ToreducetheimpactofthistheFedcouldsellTreasurybonds. d.moneysupplytorise.ToreducetheimpactofthistheFedcouldbuyTreasurybonds. 80.Supposebanksdecidetoholdmoreexcessreservesrelativetodeposits.Otherthingsthesame,thisactionwillcausethe a.moneysupplytofall.ToreducetheimpactofthistheFedcouldlowerthediscountrate. b.moneysupplytofall.ToreducetheimpactofthistheFedcouldraisethediscountrate. c.moneysupplytorise.ToreducetheimpactofthistheFedcouldlowerthediscountrate. d.moneysupplytorise.ToreducetheimpactofthistheFedcouldraisethediscountrate.    

    61) Which of the following indicates that the law of supply applies to makers of soda? A) An increase in the price of a soda leads to an increase in the demand for soda. B) An increase in the price of a soda leads to an increase in the supply of soda. C) An increase in the price of a soda leads to […]

  31) Everything else held constant, in the market for reserves, when the federal funds rate equals the discount rate, lowering the discount rate A) increases the federal funds rate. B) lowers the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect of the federal funds rate.   32) Everything else held constant, in the market for […]

  6.3   The Relationship between Price Elasticity of Demand and Total Revenue   1) Total revenue equals A) price per unit times quantity sold. B) price per unit times quantity supplied. C) price per unit times change in quantity sold. D) change in price per unit times quantity sold.     2) When demand is elastic, a fall in price causes total revenue to rise […]

    81) The Fed wants to keep the dollar at 0.80 euros per dollar. If the demand for dollars increases, A) the Fed buys dollars to decrease the supply of dollars and maintain the exchange rate. B) the Fed sells dollars to decrease the supply of dollars and maintain the exchange rate. C) the Fed buys dollars to increase the supply of dollars and […]

  51.Which of the following is a great strength of the gold standard?   A. It helped establish the dollar as a predominant vehicle currency. B. It helped governments raise foreign exchange reserves thereby increasing economic stability. C. It contained a powerful mechanism for achieving balance-of-trade equilibrium by all countries. D. It helped reduce inflation to near-zero levels in all countries engaged in international trade. E. It helped to establish […]

    21.What is Bavarian Brew’s cost of marginal bad debts? a.$150,000 b.$165,000 c.$142,500 d.$175,000         22.What is Bavarian Brew’s new average collection period if they introduce the new credit terms? a.23 days b.33 days c.25 days d.30 days         23.What is Bavarian Brew’s cost savings from the reduced investment in accounts receivables if they implement the new credit […]

    41) Production possibilities frontiers usually curve out and away from the origin.  The implication of this curvature is that A) as resources are used to produce one good, fewer resources are available to produce another good. B) the opportunity cost of producing a good goes down as more of that good is produced. C) technological change is present. D) the opportunity cost of […]