Much of the writings of Adam Smith are in close agreement with
A) the necessity of trade restrictions.
B) the first fundamental theorem of welfare economics.
C) the second theorem of welfare economics.
D) both B and C above.
B
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Consider the following five investments. If the nominal interest rate is five percent, which projects should be undertaken? (Note: The returns are for one period later.)
Investment Cost Returns A $100 $106 B 300 313 C 200 218 D 50 55 E 400 418
Which of the following is NOT illustrated by a production possibilities frontier?
A) scarcity B) opportunity cost C) necessity for choice D) who gets the goods
The Fed buys $1 million in bonds from a bond dealer. The bond dealer's bank experiences
A) an increase in assets of $1 million as its reserves increase and a decrease in liabilities as its transactions deposits fall. B) no change in assets or liabilities. Assets both increased and decreased by the amount of the check. C) a decrease in assets of $1 million as the checking account of the bond dealer increased, and a decrease in liabilities as the bank's deposits with the Fed increased by $1 million. D) an increase in assets of $1 million as its reserves increase and an increase in liabilities of $1 million as the deposits in the bond dealer's transactions account increases by $1 million.
A business owner makes 100 . items a day. Each day he/she contributes 8 hours to produce those items. If hired, elsewhere he/she could have earned $250 an hour. The item sells for $15 each. Production does not stop during weekends. If the explicit costs total $150,00 . for 30 days, the firm's accounting profit for the month equals:
a. $300,000 b. $60,000 c. $450,000 d. $240,000