The rate of return in loanable funds describes the:
A. expected profit that a project will generate per dollar invested.
B. cost of borrowing.
C. interest rate on loans.
D. the profit firms should make when investing borrowed funds.
A. expected profit that a project will generate per dollar invested.
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Consumer’s surplus is a measure of how much
A. less than his income a consumer spends on goods. B. more utility a consumer receives from his purchases than he has to pay for them. C. a consumer’s marginal utility differs from his total utility. D. a change in price induces a consumer to substitute other goods.
In a world with no money, costs are expressed in terms of other goods. If one video game costs two hamburgers, and a hamburger costs three sodas, how many sodas would it take to buy a video game?
A) 6 B) 5 C) 3 D) 3/2
Without price discrimination, a firm
A) faces a tradeoff when pricing a good that has customers with different willingness to pay. B) cannot maximize profit. C) has no market power. D) does not get any producer surplus, with all of the surplus going to consumers.
If a multi-plant firm has three plants and uses each of the plants to produce its product, the marginal cost to produce the firm's product is equal to ________.
A) the sum of the marginal costs from each of the three plants B) the plant with the highest marginal cost C) the plant with the lowest marginal cost D) the sum of the average fixed costs from each of the three plants