Suppose the desired reserve ratio is 10 percent and there is no currency drain. Then a $200 increase in the monetary base results in the banking system increasing the quantity of money by

Answer the following statements true (T) or false (F)

1. If the price of a good increases, it will tend to make the MU-to-P ratio for the good rise and the good becomes more attractive to the buyer. 2. The law of diminishing marginal utility implies that in order to induce a buyer to buy more of a product, the seller must lower its price. 3. The income effect of a price-increase for a normal good causes an increase in the consumption of the good. 4. The substitution effect of a price-decrease for a good causes an increase in the consumption of the good, regardless of whether the good is normal or inferior. 5. An increase in the real income of a consumer is one result from an increase in the price of a product that the consumer is buying.

Economies of scale imply that within some range one can increase the size of operation and:

A. total cost will decrease. B. fixed cost will decrease. C. average total cost will decrease. D. average total cost will increase.