Use the following general linear supply function:Qs = 40 + 6P - 8PI + 10F where Qs is the quantity supplied of the good, P is the price of the good, PI is the price of an input, and F is the number of firms producing the good. Suppose PI = $40 and F = 50, what is the lowest price that will induce firms to supply 400 units of output?
A. $25
B. $20
C. $30
D. $15
E. $35
Answer: C
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A car rental company will earn a net income of $6,000 per year on a new car for the first three years of its life. After three years, the car will be worthless. If the interest rate is 10 percent (0.10) per ear, what is the present value of the car to the car rental company? (Assume that each year's income is received at the end of the year.)
a. $16,413.22 b. $14,921.11 c. $18,000.00 d. $16,363.62 e. $13,523.67
Improved technology has reduced the risk of grain loss during storage. If wheat farmers expect wheat prices to rise substantially in about four months from now, which of the following is likely to be true?
a. The current supply of wheat will decline, as farmers store wheat in anticipation of the higher prices. b. The price of wheat breads is likely to decline in the future. c. The expectation of higher prices in the future is unlikely to have any impact on current wheat supply. d. The supply of wheat is likely to increase immediately.
When a nation's international borrowing is positive, then its national saving ________ its national investment.
A) exceeds B) equals C) is less than
Refer to the information. The recognition lag of fiscal policy is reflected in events:
Answer the question on the basis of the following sequence of events involving fiscal policy: (1) The composite index of leading indicators turns downward for three consecutive months, suggesting the possibility of a recession. (2) Economists reach agreement that the economy is moving into a recession. (3) A tax cut is proposed in Congress. (4) The tax cut is passed by Congress and signed by the president. (5) Consumption spending begins to rise, aggregate demand increases, and the economy begins to recover. A. 1 and 2. B. 2 and 3. C. 3 and 4. D. 4 and 5.