If the MPC = 0.75 and a household obtains $50,000 more dollars then how much would the household spend of the additional $50,000?
A. $12,500
B. $37,500
C. $40,000
D. $50,000
Answer: B
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Torrie is thinking of starting up a small business selling hand-painted wine glasses. She is considering setting up her business as a sole proprietorship. What is one disadvantage to Torrie of setting up her business as a sole proprietorship?
A) As a sole proprietor, Torrie would face unlimited liability. B) As a sole proprietor, Torrie would be subject to significant rules and regulations. C) As a sole proprietor, Torrie would be taxed twice. D) As a sole proprietor, Torrie would not have control of the business.
An example of capital is:
A) cash. B) a factory building. C) money in a checking account. D) the existing state of technology.
Answer the following questions true (T) or false (F)
1. If a firm in a perfectly competitive industry introduces a lower-cost way of producing an existing product, the firm will be able to earn economic profits in the long run. 2. Firms in perfect competition produce the productively efficient output level in the short run and in the long run. 3. Firms in perfect competition produce the allocatively efficient output in the short run and in the long run.
A regulated natural monopolist allowed to earn a "fair" rate of return would produce to the point at which
A. the price per unit equals its marginal revenue. B. the price per unit equals the long-run average cost. C. the marginal revenue curve meets the long-run average cost curve. D. the marginal revenue curve meets the long-run marginal cost curve.