A phrase coined by John Maynard Keynes to describe investors' feelings is "Animal Spirits."
Answer the following statement true (T) or false (F)
True
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Imagine Tom's annual salary as an assistant store manager is $30,000, he owns a building that rents for $10,000 yearly, and his financial assets generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. What are Tom's economic profits?
A. $35,000 B. $50,000 C. $24,000 D. $6,000
If Q = K1/2L1/2 the MPL is
a. constant b. increasing c. diminishing
If muffins and bagels are substitutes, a higher price for bagels would result in a(n)
a. increase in the demand for bagels. b. decrease in the demand for bagels. c. increase in the demand for muffins. d. decrease in the demand for muffins.
Sally's Salon sells haircuts in a perfectly competitive market. As the salon hires additional workers, the marginal revenue product of labor
a. rises whenever the marginal product of labor falls b. is equal to the market price of haircuts c. falls whenever the marginal product of labor falls d. varies only if the market price of haircuts varies e. remains constant