1. Assuming that crowding out is not an issue, if Congress increases business taxes at the same time that the Federal Reserve co
nducts an open market sale, output and price level are likely to change in which of the following ways? Output / Price Level
A. Increase / Decrease.
B. Decrease / Increase
C. Indeterminate / Decrease.
D. Decrease / Indeterminate.
E. Decrease / Decrease.
2. The election of a new president resulted in a significant increase in business confidence regarding the economy. How will this new confidence impact the loanable funds market in the short run?
Demand for Loanable Funds / Real Interest Rate
A. Increase / Increase.
B. Increase / Decrease.
C. Increase / No Change.
D. Decrease / Decrease.
E. Decrease / Increase
3. When a bank’s excess reserves increase by $375 after $500 was deposited in the bank, the reserve requirement must be
a. 10 percent.
b. 15 percent.
c. 20 percent.
d. 25 percent.
e. 30 percent.
The total cost is $1600 for 5,000 chickens minus the fixed cost of $800, which equals $800. The total cost is total of fixed cost and variable cost as in absence of production the total variable cost is zero so from this we can conclude that total fixed cost is zero.
Then divide the total variable cost ($800) buy what Ralph pays his workers ($100), which comes to 8.
