A manager invests $400,000 in a technology that should reduce the overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85 . This affects
a. Economic profits
b. Accounting profits
c. Both a and b
d. None of the above
c
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Depreciation or consumption of fixed capital depreciation measures:
a. net investment less gross investment. b. the loss of productive ability due to capital intensive production. c. capital that is wasted in the production process. d. the value of existing capital stock used up in the production process. e. the decline in the value of inventories caused by inflation.
Phil and Kelly have always wanted to take a cruise. Although willing to pay $5,000 for a Caribbean cruise for two, they were able to purchase a cruise vacation for two for $3,500 . Their total consumer surplus amounted to:
a. $750 b. $5,000. c. $1,500. d. $3,500.
The government regulates monopolies in order to
A. Prohibit mergers or acquisitions that would lessen competition. B. Protect consumers from false advertising. C. Ensure that product quality meets minimum standards, such as testing of new drugs. D. All of the choices are correct.
Refer to the information provided in Table 25.5 below to answer the question(s) that follow.
Table 25.5
Refer to Table 25.5. The required reserve ratio is 10%. If the Bloomington Bank is meeting its reserve requirement and has no excess reserves, its reserves equal
A. $50. B. $70. C. $120. D. $170.