When graphed, total fixed cost will
a. slope upward to the right at a constant positive slope
b. first decrease and then increase
c. first increase and then decrease
d. slope down forever
e. be a horizontal line
E
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Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs. The shop earns $600,000 in revenues and has $1.1 million in net worth. Based on this information, what is economic profit for Tommy's Teddy Bears?
A) $250,000 B) $300,000 C) $500,000 D) $1.35 million
A firm should hire workers up to the point where
A) MP = P. B) MFC = P. C) MFC = MRP. D) MP = MRP.
If expectations are formed rationally, wages and prices are completely flexible in both the short run and the long run, and policy is correctly anticipated, increases in aggregate demand will stimulate the economy to higher levels of Real GDP in
A) the short run or the long run. B) neither the short run nor the long run. C) the short run, but not in the long run. D) the long run, but not in the short run.
Economic rents can lead to large wage differentials.
Answer the following statement true (T) or false (F)