Suppose the equilibrium price of cotton is $100 per ton. A price support set at ________ than $100 per ton ________
A) less; increases producer surplus
B) less; increases consumer surplus
C) more; increases consumer surplus
D) more; decreases marginal cost
E) more; creates a surplus that the government must buy
E
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The reserve ratio equals 20 percent. The Fed buys $1 million in U.S. government securities. The most the money supply can increase is
A) $5 million. B) $4 million. C) $10 million. D) $1 million.
In two-part pricing
A) consumers pay a lump-sum for all the goods purchased. B) the consumer must pay a lump sum if he buys more than a certain number of units of a good. C) a firm charges more for units purchased on the weekend than for those purchased during the week. D) the average price paid per unit is higher with a small number of units purchased than if a large number of units is purchased.