How does a firm calculate its profit?
(A) Total revenue minus total cost.
(B) Variable cost plus total cost.
(C) Marginal revenue minus marginal cost.
(D) Total revenue minus marginal revenue.
Ans: (A) Total revenue minus total cost.
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John's utility of wealth curve is shown in the above figure. He currently has total wealth of $20,000. If there is a 50 percent chance that his $10,000 car will be stolen, what is the value of insurance against the theft?
A) $0 B) $5,000 C) $7,000 D) $13,000
In addition to the consumer price index, the Bureau of Labor Statistics also calculates the
a. macroeconomic price index. b. producer price index. c. rental unit price index. d. terms of trade.
The law of demand states that, other things equal:
A. price and quantity demanded are inversely related. B. the larger the number of buyers in a market, the lower will be product price. C. price and quantity demanded are directly related. D. consumers will buy more of a product at high prices than at low prices.
GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,410 billion. Net exports must be:
A. +$53 billion B. -$47 billion C. -$84 billion D. -$161 billion