Tim Tupper's term paper-typing business is a perfectly competitive firm in long-run equilibrium. Which of the following does not describes the firm's situation?
a. It will be minimizing average total cost.
b. It will be charging a price equal to marginal cost.
c. It will be charging a price equal to average total cost.
d. It will be earning a normal profit.
e. Entrepreneurs outside the industry will be eager to enter.
E
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A consumer's utility function is given by: U(x,y) = 10xy
Currently, the prices of goods x and y are $3 and $5, respectively, and the consumer's income is $150. a. Find the MRS for this consumer for any given bundle (x,y). b. Find the optimal consumption bundle for this consumer. c. Suppose the price of good x doubles. How much income is required so that the consumer is able to purchase the original consumption bundle (if you were unable to solve d., then take a guess at what the optimal bundle is before solving this) d. Now that the price of good x has doubled, how much income is needed for the consumer to reach the original level of utility? Is this more or less that what you found in e.?
If the exchange rate between the Canadian dollar (C$) and the U.S. dollar ($) changes from 1C$ = $1.30 to 1C$ = $1.05 we can say that:
a. the U.S. dollar has depreciated with respect to all the currencies across the world. b. the Canadian dollar has appreciated with respect to the U.S. dollar. c. the U.S. dollar has appreciated with respect to the Canadian dollar. d. the Canadian dollar has depreciated with respect to all the currencies across the world. e. the Canadian dollar has appreciated with respect to all the currencies across the world.
Which of the following is a valid concern about the national debt for a country whose debt is held entirely by its citizens?
a. The welfare of future generations will be directly related to the per capita size of the national debt that they inherit. b. Growth of the national debt will eventually lead to the bankruptcy of the government. c. When the debt comes due, future generations may be unable to pay it off. d. If the increases in the national debt reduce private expenditures on capital formation, future generations may have lower incomes because they will inherit a smaller stock of capital.
Many Americans have been hurt by recent economic events. Raising the minimum wage is the best policy to improve the wages and employment opportunities of Americans. This argument is
a. correct because a higher minimum wage will increase total income which will stimulate aggregate demand and employment. b. incorrect because while some people will receive higher wages, others will experience less employment and fewer training opportunities. c. correct because most minimum wage workers are household heads trying to earn enough to support their family. d. incorrect because the government has too big a deficit to pay for the increase in the minimum wage.