Claude's Copper Clappers sells clappers for $40 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $39, average variable cost is $45, and average total cost is $60 . To improve his profit/loss situation, Claude should
a. increase output
b. reduce output but not to zero
c. maintain the present rate of output
d. shut down
e. raise the price
D
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Over time, housing shortages caused by rent control
a. increase, because the demand for and supply of housing are less elastic in the long run. b. increase, because the demand for and supply of housing are more elastic in the long run. c. decrease, because the demand for and supply of housing are less elastic in the long run. d. decrease, because the demand for and supply of housing are more elastic in the long run.
You have $1,000 in your checking account at Generous Savings and Loan (GSL). GSL holds $300 of your money in reserve and makes a $700 student loan to Wilma, who promises to repay the loan with interest. Wilma now has an additional $700 in her checking account. By how much has the money supply M1 increased?
a. $2,000 b. $1,700 c. $1,000 d. $700