Refer to Table 12-3. What will Arnie's output be and how much profit will he earn if the market price of basketballs is $5.00?
A) Q = 0; profit = -$10.00
B) Q = 3; profit = -$7.50
C) Q = 1; profit = -$10.
D) Price and profit cannot be determined from the information given.
B
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Suppose the nominal interest rate is 15% and the rate of inflation is 3%. The real interest rate is therefore
A) 3%. B) 5%. C) 12%. D) 18%.
First-come, first-serve allocation schemes promote efficiency
Indicate whether the statement is true or false
A purely competitive seller should produce (rather than shut down) in the short run:
A. only if total revenue exceeds total cost. B. only if total cost exceeds total revenue. C. if total revenue exceeds total cost or if total cost exceeds total revenue by some amount less than total fixed cost. D. if total cost exceeds total revenue by some amount greater than total fixed cost.
A consumer has spent all of his income on pizza and movies. The price of a piece of pizza is $1 and the price of a movie is $6. The marginal utility of the last piece of pizza is 5 and the marginal utility of the last movie is 24. The consumer has
A. not maximized utility. He should cut back consumption of each good. B. maximized utility. C. not maximized utility. He should cut back on pizza and buy more movies. D. not maximized utility. He should cut back on movies and buy more pizza.