Unexpectedly high inflation:
a. Is only a problem for private individuals and not for businesses or the government.
b. Tends to redistribute income more than it harms the nation as a whole.
c. Makes everyone worse off.
d. Reduces business profitability.
e. Is only a problem for the government.
.B
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Fresh Flour makes baking flour and sells its flour in 4 pound sacks or bags. The managers of Fresh Flour are considering whether the firm should make or buy the flour sacks. To make the sacks, Fresh Flour needs a $500,000 piece of equipment. Using this equipment, Fresh Flour can make a flour sack for $0.01 and, for simplicity, ignore taxes and assume that the $0.01 cost includes depreciation and
all other costs. Fresh Flour would finance the $500,000 investment using its own funds and, if it purchased the flour sacks from another firm, it would pay $0.19 a flour sack. The life span of the equipment is 10 years and it has no salvage value at the end of the ten years. The discount rate is 6 percent. How many flour sacks does Fresh Flour need each year in order for the net present value to be positive? A) 259,666 B) 377,416 C) 352,589 D) 412,369
A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65 . At what price would the firm consider shutting down in the short run?
a. $10 b. $25 c. $65 d. $70
Owners claim residual income
Indicate whether the statement is true or false
Specialization: a. is a way for individuals to make the best use of resources by devoting themselves to one primary productive activity. b. is a way for society to become wealthier while not using their resources
c. is a way for people to avoid having to trade. d. increases one's opportunity cost of the activity they choose to specialize in.