A local doughnut shop produces about 600 dozen doughnuts daily. If flour prices increase 20 percent
a. only marginal cost will shift up.
b. only marginal cost and average total cost will shift up.
c. marginal cost, average variable cost, and average total cost will shift up.
d. marginal cost, average total cost, and average fixed cost will shift up.
C
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Which of the following would tend to increase the price of lumber?
a. a technological advance that lowers the cost of cutting timber b. an increase in the demand for newly constructed homes c. a decrease in the demand for wooden rocking chairs d. a decrease in the tax imposed on firms who produce lumber
If the banking system has $50 billion in excess reserves, and the required reserve ratio is 25 percent, what is the maximum amount by which the money supply can be increased?
a. $250 billion b. $200 billion c. $50 billion d. $25 billion