In a monopolistically competitive market, the long-run profit-maximizing price of a good is equal to its average cost of production

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic. So, imposing a tax on the good results in a ________ in the price paid by buyers and ________ in the equilibrium quantity

A) rise; an increase B) rise; a decrease C) fall; an increase D) fall; a decrease E) rise; no change

The reserve requirement is 4 percent, banks hold no excess reserves and people hold no currency. If the Fed sells $10,000 worth of bonds, what happens to the money supply?

a. it increases by $250,000 b. it increases by $200,000 c. it decreases by $200,000 d. it decreases by $250,000