Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. An accountant would calculate the total profit for one birdhouse to be
a. $7.
b. $11.
c. $12.
d. $15.
d
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Which of the following $5,000 face-value securities has the highest yield to maturity?
A) a 6 percent coupon bond selling for $5,000 B) a 6 percent coupon bond selling for $5,500 C) a 10 percent coupon bond selling for $5,000 D) a 12 percent coupon bond selling for $4,500
One event that undermined the belief that the Phillips curve represented a structural relationship was
A) the belief of Milton Friedman and Edmund Phelps that expected inflation remains constant. B) the erratic behavior of unemployment rates and inflation rates during the 1960s. C) the extended period of time that both unemployment and inflation remained high during the Great Depression. D) the increase in both the inflation rate and the unemployment rate in the 1970s.
When the U.S. exchange rate rises, the trade deficit will:
A. usually fall. B. remain unaffected. C. be balanced by an increase in net exports. D. usually rise, too.
Which of the following is most vital if the firms in an industry are going to earn economic profit in the long run?
a. an inelastic demand for the product produced by the firms b. an elastic demand for the product produced by the firms c. managerial efficiency d. high barriers to entry into the industry