Refer to Scenario 9.6 below to answer the question(s) that follow. SCENARIO 9.6: Celeste borrowed $40,000 from her brother to open a car wash. She pays her brother a 5% yearly return on the money he lent her. Her other yearly fixed costs equal $18,000. Her variable costs equal $40,000. In her first year, Amy sold 40,000 car washes at a price of $2.50 per car wash.Refer to Scenario 9.6. Celeste's total revenue is
A. $2,000.
B. $44,000.
C. $60,000.
D. $100,000.
Answer: D
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A straight-line demand curve with negative slope intersects the horizontal axis at 200 tons per week. The point on the demand curve at which the price elasticity of demand is 1 corresponds to a quantity demanded
A) of 0 tons. B) of 100 tons. C) of 200 tons. D) that would be negative if a negative quantity demanded were possible.
A high unemployment rate most likely means that there is a:
A. high rate of inflation in the economy. B. large GDP gap in the economy. C. low rate of interest in the economy. D. small GDP gap in the economy.
Okun's Law states that
A) there is a relationship between the unemployment rate, real GDP, and potential GDP. B) supply creates its own demand. C) as the unemployment rate rises, the inflation rate falls. D) a higher inflation rate leads to a higher nominal interest rate. E) as the real wage rate falls, the quantity of labor demanded increases.
In order to be effective, a price floor
A) must be set below equilibrium price. B) must be set above equilibrium price. C) must be set at equilibrium price. D) must be a zero price.