Jessica makes photo frames. She spends $5 on the materials for each photo frame. She can create one photo frame in an hour. She earns $10 per hour at a part-time job at the local coffee shop. She can sell a photo frame for $30 each. An economist would calculate the total profit for one photo frame to be
a. $10.
b. $15.
c. $20.
d. $25.
b
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Wage rates may vary among labor markets for each of the following reasons, except one. Which is the exception?
a. differences in job risks b. differences in social status associated with the job c. differences in market size d. differences in educational requirements e. differences in job training requirements
the multiplier effect
What will be an ideal response?
Exhibit 9-3 Keynesian aggregate expenditures model
?
As shown in Exhibit 9-3, if GDP is $6 trillion, the economy experiences unplanned inventory:
A. depletion of $2 trillion. B. depletion of $6 trillion. C. accumulation of $2 trillion. D. accumulation of $6 trillion.
Suppose there are two countries that are identical in every way with the following exception. Country A is pursuing a fixed exchange rate regime and country B is pursuing a flexible exchange rate regime. Suppose taxes are increased in both countries rises by the same amount. Given this information, we know that
A) the change in output in A will be greater than in B. B) the change in output in B will be greater than in A. C) the change in output will be the same in both countries. D) the relative output effects are ambiguous.