Suppose a consumer wants to obtain the highest possible satisfaction from goods purchased on a fixed budget. Which of the following must be equal for all goods?
A. Total utility.
B. Marginal utility.
C. Average utility.
D. Marginal utility per dollar.
Answer: D
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Suppose that a firm earned $500,000 in total revenue. At the same time, it incurred labor costs of $200,000; economic depreciation of $50,000; normal profit of $75,000; interest paid to the bank of $25,000; and used other factors of production that
cost $100,000. The economic profit earned by the firm equals A) $275,000. B) $175,000. C) $50,000. D) $200,000. E) $500,000.
Which of the following can be a barrier to entry?
i. ownership of a necessary input ii. requiring a government license iii. large diseconomies of scale A) i only B) ii only C) i and iii D) i and ii E) i, ii, and iii
An increase in public saving has what impact on the market for loanable funds?
A) The demand for loanable funds decreases. B) The supply of loanable funds decreases. C) The supply of loanable funds increases. D) The demand for loanable funds increases.
As an option nears its expiration date, the size of the premium approaches
A) zero. B) infinity. C) its intrinsic value. D) an amount which varies, depending on prevailing market interest rates on the expiration date.