The optimal number of trucks is
Consider the following production function for a delivery service.
Each delivery generates $200 in gross revenue, and the tax rate is 10 percent on profits. Each truck costs $11,000.
a) 1
b) 2
c) 3
d) 4
e) 5
c) 3
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If at a given moment, no matter what the price, producers cannot change the quantity supplied, the momentary supply
A) has zero elasticity. B) has unit elasticity. C) has infinite elasticity. D) does not exist.
A manager invests $400,000 in a technology that should reduce the overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85 . All else equal, if the firm continues its production in the same economic environment, the firm's economic profits should
a. increase if output is low enough b. decrease c. stay the same d. increase if output is high enough
Supply-side tax cuts designed to increase investment spending are attractive in theory, but in practice
a. the effect is the opposite of what theory suggests. b. are less useful, because they take a long time to increase the capital stock. c. they have no effect on the capital stock in the short or long run. d. are powerful in the short run as capital stock rapidly increases, but the effect tapers off in the long run.
The "ceteris paribus" clause in the law of demand allows which of the following factors to change?
A. consumer tastes and preferences B. prices of other goods C. expectations D. price of the good demanded