Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. The explicit cost for one birdhouse is
a. $4.
b. $5.
c. $8.
d. $9.
b
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Which of the following statements represents bad decision making?
A. I've put in so much time on this paper, I can't quit now. B. I've already paid for the ticket so I might as well stay to the end. C. I've already spent 3 years in the college so I can't drop out and go to work now. D. My stock has dropped $10 a share so I can't afford to sell it now. E. all of the above.
Assuming all excess reserves are loaned out, if the reserve ratio is 8 percent, the money multiplier will be equal to:
A. 2. B. 8. C. 12.5. D. 16.67.
When price was 5, quantity demanded was 10. When price increased to 6, quantity demanded decreased to 9. Therefore, when price increased, total revenue
A. decreased from 54 to 50, indicating that demand is inelastic. B. increased from 50 to 54, indicating that demand is elastic. C. increased from 50 to 54, indicating that demand is inelastic. D. decreased from 54 to 50, indicating that demand is elastic.
Suppose there is a permanent shift of consumer preferences away from pretzels and toward potato chips. The most likely result would be
A. in the short run, economic losses in the potato chip market. B. in the short run, a rise in the price of pretzels. C. in the long run, a fall in the supply of potato chips. D. short-run profits in the potato chip market increase.