The Wax Works sells 500 candles at a price of $10 per candle. The Wax Works? total economic costs for producing 500 candles are $2,000. The Wax Works? economic profit is
A. $2,000.
B. $3,000.
C. $5,000.
D. indeterminate from this information.
Answer: B
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The above figure illustrates a perfectly competitive firm. Curve C represents the
A) MR curve. B) ATC curve. C) MC curve. D) market demand curve. E) AFC curve.
Measurements of TFP indicate that the East Asian success story is based on
A) a significantly different economic model from the one followed in the West. B) unusually large amounts of innovation. C) rapid increases in the education of the work force. D) high amounts of savings and investment. E) large current account surpluses.
When prices rise, consumers and businesses hold larger money balances. This reduces the supply of loanable funds, increases the interest rate, and discourages both consumption and investment. This process is called the:
a. interest-rate effect. b. real balance effect. c. investment effect. d. disinvestment effect.
The spending multiplier effect is the result of a shift in the aggregate expenditures (AE) line
a. True b. False Indicate whether the statement is true or false