As a firm in a monopolistically competitive market successfully differentiates its products and earns a positive economic profit, it is soon imitated by its rivals and profit of the firm falls to zero

Which of the following could cause the supply of carrots to decrease?

a. Consumers' incomes decrease. b. There is a technological advance in carrot production. c. Fertilizer costs increase. d. The number of farmers growing carrots increases. e. The price of carrots decreases.

If the Fed sells $10 million in bonds to a bank, and the required reserve ratio is 20 percent, then the banking system can:

a. decrease the money supply by up to $10 million. b. decrease the money supply by up to $40 million. c. decrease the money supply by up to $50 million. d. decrease the money supply by up to $2 million. e. increase the money supply by up to $50 million.