The method of estimating long-run costs in which knowledgeable professionals familiar with production facilities and processes calculate optimal combination of inputs to produce given quantities and then estimate costs is known as
A) engineering cost estimating.
B) the survivorship method.
C) regression analysis.
D) None of the above
A
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A negative income elasticity of demand indicates that the product
A. is a complementary good. B. is an inferior good. C. is a normal good. D. is a substitute good.
A government proposal to increase marginal tax rates on the wealthiest 2 percent of U.S. residents is supposed to generate an additional $100 billion in tax revenues. It is likely that
A) the actual revenue raised will exceed the $100 billion, because the other 98 percent of the population will increase their work effort with a more fair tax system. B) the actual revenue raised will be more than $100 billion, because the short-run aggregate supply curve is upward sloping. C) the actual revenue raised will be close to $100 billion, because the wealthy don't respond to work incentives the way poorer workers do. D) the actual revenue raised will be less than $100 billion, because some of the people will respond by working less and earning less income that can be taxed.
As long as the discount rate is ________ the interest rate on a loan, the present value of the cost of an investment equals the initial cost of the investment.
A) equal to B) less than C) exactly double D) greater than
Firms that are price takers
A) must lower their prices to increase sales. B) are able to sell a fixed quantity of output at the market price. C) can raise their prices as a result of a successful advertising campaign. D) are able to sell all their output at the market price.