Tim Tupper contracts with two other students to help him provide a term paper-typing service. In the last two weeks of the semester, he sees a tremendous increase in demand. His profit-maximizing response would be represented by
a. a rightward shift of the supply curve because it is possible to earn economic profits
b. a rightward shift of the supply curve because the increase in demand is probably only temporary
c. a reduction in supply to take full advantage of the increase in demand
d. a movement up to the right along the supply curve because the increase in demand is probably only temporary
e. an upward movement in horizontal demand curve he faces because now he can charge a lower price
D
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An isoquant indicates different combinations of
A) two inputs that can be purchased for the same amount of money. B) two inputs that can produce the same amount of output. C) output that can be produced with the same amount of input. D) output that cost the same amount to produce.
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:
A. $0.13. B. $1.25. C. $8. D. $200.