Pretty Polly produces dresses for little girls. At its current advertising level, Pretty Polly's marginal cost of advertising is $500,000 and their marginal benefit is $500,000. Which of the following is true?
A) The firm should increase the amount of advertising to increase its net profit.
B) The firm is currently maximizing its net profit.
C) The firm should reduce the amount of advertising to increase its net profit.
D) The firm should double the amount of advertising.
B) The firm is currently maximizing its net profit.
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National income accounting helps economists and policymakers ________.
A. determine which firms are likely to succeed or fail B. measure what is occurring in each specific labor market C. follow the long-run course of the economy to assess whether it has grown or stagnated D. It helps accomplish all of these
Refer to the scenario above. What will be the capital stock in the economy in the current year, if the capital stock in the last year was $1,000?
A) $1,400 B) $1,200 C) $1,600 D) $1,800
Suppose a credit union strives for a 3% real return on its loans to members, and expects a 2% inflation rate. What nominal rate of interest should it charge its members?
A) 0% B) 1% C) 3% D) 6%
Which of the following would be a private cost to a cigarette smoker?
a. Cost to the employer of the higher health insurance premiums due to the hiring of a smoker. b. Cost to the employer of the extra effort lost due to the increased missed days of work as a result of smoking. c. Cost to the city of extra park cleanup due to the presence of cigarette butts. d. Price of the pack of cigarettes. e. Cost to the government to pay the hospital expenses of indigent smokers.