Explain how a firm decides how much in loanable funds it will demand
It maximizes profit by demanding loanable funds up to the quantity where the marginal revenue product of
the last dollar borrowed equals the marginal factor cost of that last dollar borrowed. The marginal factor
cost is the interest rate charged for the last dollar borrowed.
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Refer to Figure 2-2. If Mendonca chooses to produce 120 pounds of meat, how much vegetables can it produce to maximize production?
A) 0 pounds of vegetables B) 60 pounds of vegetables C) 100 pounds of vegetables D) 160 pounds of vegetables
Suppose two economies, the United States and Saudi Arabia, each have a GDP of $1,000 . A U.S. war effort involves the purchase of $100 of Saudi oil, which is financed by selling $100 worth of U.S. government bonds to Saudi Arabia. In subsequent years, GDP remains at $1,000 for each country and the United States imposes a $10 tax to make its debt payments to the Saudis. Now while the United States
is still debt obligated, a. U.S. consumption is $1,000 and Saudi consumption is $1,000 b. U.S. consumption is $990 and Saudi consumption is $990 c. U.S. consumption is $1,010 and Saudi consumption is $990 d. U.S. consumption is $1,000 and Saudi consumption is $1,010 e. U.S. consumption is $990 and Saudi consumption is $1,010
Assuming the standard assumptions, in a repeated-play ultimatum game, the first player's best strategy in the last round is to:
A. split the money evenly with a bit more going to him or herself. B. take all the money for oneself. C. give the most money to the opponent. D. give the most money to oneself.
John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the accompanying table.Time cleaning windows (hours/day)Total number of windows cleaned0017211314416517 The first hour John spends cleaning windows costs him ________ that he could have earned in the grocery store.
A. $7 B. $14 C. $2 D. $18