Suppose hammers are produced in a perfectly competitive market. Ace Manufacturing is currently producing 1,000 hammers. It estimates that the marginal revenue of selling another hammer is $15, the marginal cost is $17, and the average total cost is $13 . From these figures, an economic consultant would conclude that Ace
a. is making an economic profit of $2,000
b. is maximizing total profit
c. should produce more output
d. should raise the price of a hammer
e. will soon go out of business
A
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A tax is progressive if the average tax rate
A) increases as income increases. B) increases as income decreases. C) is negative. D) is positive.
Refer to Table 2.3. Assume that 2010 is the base year. Real GDP in 2007 is
A) $490.00. B) $568.00. C) $580.00. D) $671.00.
A change in any of the ceteris paribus conditions for demand leads to a
A) a good going from an inferior good to a normal good. B) movement along the demand curve. C) shift of the demand curve. D) change in supply.
What method of inventory valuation should be used for economic decision-making problems?
a. book value b. original cost c. current replacement cost d. cost or market, whichever is lower e. historical cost