Ronny's Pizza House is a profit maximizing firm in a perfectly competitive local restaurant market, and their optimal output is 80 pizzas per day. The local government imposes a new tax of $250 per year on all restaurants that operate in the city
How does this affect Ronny's profit maximizing decisions? A) No impact on the restaurant's decisions
B) Ronny's will remain in business but will definitely produce less pizza
C) Ronny's will definitely shut down
D) Ronny's decision depends on the circumstances -- if their profits are larger than $250 per year, then the tax does not impact output; otherwise, Ronny's Pizza House will shut down.
D
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Moving along the aggregate production function shows the relationship between ________, holding all else constant
A) capital input and real GDP B) labor input and real GDP C) labor input, capital input and real GDP D) technology and real GDP
Assume that you purchased a $1,000 perpetual bond that pays a market interest rate of 5 percent. If you attempted to sell this bond today subsequent to an increased market rate of interest of 7.5 percent, then you
a. could only sell this bond at a capital loss. b. could sell this bond at a capital gain. c. would not be able to sell this bond. d. could exchange your bond yielding 5 percent for a bond yielding 7.5 percent on an even exchange basis.
Most people buy insurance because they
a. are risk lovers b. enjoy the gamble c. are risk neutral d. are risk averse
Which of the following scenarios would serve to decrease the demand for unskilled labor in the U.S.?
a. increased productivity gains among unskilled laborers b. increased demand for goods produced by unskilled laborers c. increased international trade with countries where unskilled labor is more plentiful d. increased supply of migrant workers