John is planning ahead for retirement in a two-period world. When John is young he will earn $1 million, and when John is old and retired he will be given $50,000 from Social Security. If the interest rate between the two time periods is 7 percent, what is the slope of John's budget constraint when considering the consumption possibilities between the two periods if consumption when young is
graphed on the horizontal axis and consumption when old is graphed on the vertical axis?
a. -0.89
b. -1.05
c. -1.07
d. -1.12
c
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Refer to Variable Cost of Production. If the firm actually has $20 in fixed costs, the average cost of the second unit of output is
The following questions refer to the following table which shows a firm's variable costs of production.
a. $20 per unit.
b. $25 per unit.
c. $30 per unit.
d. $35 per unit.
Compared to a perfectly competitive market, a single-price monopoly sets
A) a lower price. B) the same price. C) a higher price. D) a price that might be higher, lower, or the same depending on whether the monopoly's marginal revenue curve lies above, below, or on its demand curve. E) a price that might be higher, lower, or the same depending on whether the monopoly's marginal cost curve lies above, below, or on its marginal revenue curve.
If a price decrease of a product significantly raises its revenues, then the absolute price elasticity of demand for that product must be
A) less than one. B) equal to one. C) greater than one. D) an example of unit elasticity.
What is typically the main cost of pursuing a college education?
A) tuition B) room and board C) books and supplies D) income forgone by not working