Refer to the table below. Busy Betty sells her cakes for $20 each and her constant marginal cost to produce each cake is $12, which is equal to her (constant) average total cost. If she does not sell a cake the day she makes it, she sells it as day-old cake for $10. What is her expected marginal cost of holding the 22nd cake in inventory?
The above table shows the probability distribution of cake sales at Busy Betty's Bakery.
A) $0.40
B) $1.20
C) $0.80
D) $2.00
C) $0.80
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When a U.S. firm sells a good abroad for, say, 100 euros (assume $1=1euro), U.S. net exports increase by $100. These $100 in exports can be accounted for as $100 increase in capital outflow because ________
A) if the 100 euros are kept in the foreign bank, the U.S. firm is giving a loan to that bank B) if the U.S. firm uses the 100 euros to buy a share of stock in a foreign firm, the firm is supplying U.S. capital to that foreign firm C) if the U.S. firm uses the proceeds to build a new factory in that country, it is supplying U.S. capital to that country D) all of the above E) none of the above
One effect of the lemons problem in the used car market is that
a. the market is efficient b. without reliable information, lemons become increasingly common c. no good cars are offered on the market d. no lemons are offered on the market e. good cars sell at more than their market value
Federal government spending as a percentage of GDP was the highest since 1960 during: a. the Great Depression
b. the aftermath of the oil crisis in the Gulf nations. c. World War II. d. the aftermath of the Great Recession.
The GDP figures fail to count labor services and other household production. Once this omission is taken into account,
a. the income differences between the high and low income countries are small. b. the differences in living standards between the high and low income countries are small. c. the income differences between the high and low income countries are still huge. d. the life expectancy in the high and low income countries is approximately the same.