Which of the following is a common mistake managers make?
A. Treating implicit opportunity costs as part of the total costs of using resources.
B. Maximizing the value of the firm instead of maximizing the firm's profits.
C. Using marginal analysis to make output decisions.
D. Reducing price to increase the firm's share of total market sales.
E. all of the above.
Answer: D
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The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $8 per hour, how many hours do students work?
A) 12,000 hours B) 9,000 hours C) 6,000 hours D) None of the above answers is correct.
You are sick and tired of your old wardrobe. You decide to donate it to a charity of your choice. Your action
a. Creates wealth by moving the clothes from lower value use to higher value use b. Destroys wealth since you lose your clothes c. Creates wealth by making you feel richer d. All of the above
If we read that the CPI had value of 120 in 2005, we would know that
a. the typical market basket in 2005 was 20 percent more expensive than in the previous year b. the typical market basket in 2005 was 120 percent more expensive than in the base year c. the typical market basket in the base year was 120 percent more expensive than in 2005 d. the typical market basket in 2005 was 20 percent more expensive than in the base year e. the cost of a loaf of bread is higher now than it has been during the past ten years
Assume the required reserve ratio is 20 percent and the FOMC orders an open market purchase of $100 million in government securities from member banks. If the oversimplified money multiplier is assumed, then the money supply will
a. increase by $500 million. b. increase by $100 million. c. decrease by $100 million. d. decrease by $500 million.