Suppose Bev's Bags makes two kinds of handbags-large and small. Bev rents an industrial space where she keeps the fabric, the industrial sewing machine, her measuring board and cutting shears, extra needles, thread and buttons, and labels. If Bev were to produce no bags, what would her variable cost include?
A. The cost of the fabric
B. The sewing machine
C. The measuring board
D. Her variable cost would be zero if she produced zero bags.
D. Her variable cost would be zero if she produced zero bags.
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The authors provide an example that illustrates the calculation of the present discounted value for the lost wages from a deceased worker, and one component in this calculation is the worker's annual mortality rate (m)
Suppose we conduct this computation in two different ways --- one calculation assumes m is constant for all future periods, and the other calculation allows m to decline over time due to improvements in medical technology. Which estimated PDV will be larger? A) The PDV with constant m will be larger B) The PDV with variable m will be larger C) The two PDV's will be equal D) The answer to this question depends on the assumed interest rate
Peg's Kegs sells kegs in a perfectly competitive market. Because low demand forced price below average variable cost, Peg has made the short-run decision to shut down. Her current loss is
a. zero b. greater than if she had kept operating c. the same as the losses she was incurring while operating d. equal to fixed cost e. less than her total revenue
If the marginal propensity to save is 0.4 and disposable income decreases from $2,000 to $1,000, saving will
A. decrease by $400. B. decrease by $80. C. increase by $80 D. increase by $400.
The impossibility theorem is the idea that
A. we cannot devise a voting scheme that respects individual preferences and gives consistent, non-arbitrary results. B. private parties cannot arrive at the efficient solution without government intervention. C. it is impossible for lawmakers to get legislation passed without agreeing to help other lawmakers get their legislation passed. D. it is impossible to exclude someone from enjoying the benefits of a public good.