The area below the demand curve and above the supply curve

The ability of banks to create money has its source in which of the following _____?

A. the 100 percent reserve requirement

B. the ability of the government to mint as much currency as it wishes

C. the banks’ ability to issue currency (bank notes) of their own

D. fractional-reserve banking (i.e. less than 100 percent reserve requirement)

Suppose a market has the demand function Qd=200-5P. At which of the following prices will total revenue be maximized? a. $30 b. $20 C. $40 d. $10

Assume Diana buys computers in a competitive market. It follows that

a. Diana has a limited number of sellers to turn to when she buys a computer. b. Diana will find herself negotiating with sellers whenever she buys a computer. c. if Diana buys a large number of computers the price of computers will rise noticeably. d. None of the above is correct.

In a market economy, who or what determines who produces each good and how much is produced?

a. the government b. lawyers c. lotteries d. prices

For teenagers, a 10 percent increase in the price of cigarettes leads to a

a. 1 percent reduction in the quantity demanded of cigarettes. b. 4 percent reduction in the quantity demanded of cigarettes. c. 10 percent reduction in the quantity demanded of cigarettes. d. 12 percent reduction in the quantity demanded of cigarettes.

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

a. encourage marijuana use, and the evidence supports this argument. b. encourage marijuana use, but the evidence does not support this argument. c. discourage marijuana use, and the evidence supports this argument. d. discourage marijuana use, but the evidence does not support this argument.