Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $2,000 per year. He has no other opportunities. He should:
A. not purchase the truck if the real interest rate is greater than 2 percent.
B. purchase the truck if the real interest rate is greater than 10 percent.
C. purchase the truck only if the real interest rate is less than 2 percent.
D. purchase the truck if the real interest rate is less than 10 percent.
Answer: D
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A decrease in net taxes: a. increases GDP as much as an equal decrease in government purchases. b. increases GDP less than an equal increase in government purchases. c. decreases GDP more than an equal decrease in government purchases. d. changes GDP in an unpredictable manner
e. has no effect on GDP.
Any time the economy is between a trough and a peak of the business cycle it is in a recovery phase
Indicate whether the statement is true or false
Knowledge that is patented is a
a. public good, whereas knowledge that is not patented is a common resource. b. private good, whereas knowledge that is not patented is a club good. c. common resource, whereas knowledge that is not patented is a private good. d. club good, whereas knowledge that is not patented is a public good.
Frieda enjoys cooking and baking. Her utility function is U(C, B) = 6C + 3B, where C is the number of hours she spends cooking and B is the hours she spends baking. What is Frieda's MRS of cooking with baking?
A. 1/6 B. 2 C. 6 D. It cannot be determined from the given information.