Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?
A) $105
B) $35
C) $9.55
D) $5
D
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In a world where the price level could adjust immediately to its new long-run level after a money supply increase
A) The dollar interest rate would increase because prices would adjust immediately and prevent the money supply from rising. B) The dollar interest rate would fall because prices would adjust immediately and prevent the money supply from rising. C) The dollar interest rate would fall because prices would adjust immediately and prevent the money supply from decreasing. D) The dollar interest rate would decrease because prices would adjust immediately and prevent the money supply from decreasing. E) The dollar interest rate would fall because prices would not be able to prevent the money supply from rising.
The purpose of deregulating banks during the 1980s was to: a. eliminate the risk that banks incurred
b. allow banks to compete with other financial institutions. c. allow U.S. banks to compete with foreign banks. d. help consumers earn more interest. e. decrease the cost of banking regulation.
In the extended version of the circular flow model, money flows from
a. government to households as tax payments b. foreign economies to households as payments for exports c. government to firms as payments for goods and services d. firms to foreign economies as payments for exports e. households to foreign economies as payments for resources
If the price elasticity of supply is elastic, which of the following could be a possible value of the elasticity?
A. 3 B. 1 C. 0.3 D. 0