The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the fixed cost?
A) 200
B) 5Q
C) 5
D) 5 + (200/Q)
E) none of the above
A
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Suppose a patent is granted for a product that has the linear demand curve P = a - b Q. The constant marginal cost of producing this product is $50 per unit, a unit sells for $150, and consumers purchase 100 units of the good at that price
If the monopoly is maximizing profit, b equals A) 1. B) 1.5. C) 2. D) 2.5.
Suppose an individual has $100 to invest. Two assets are available. One asset will yield a return of 10%, while the other risky asset will yield 0% with probability .5 and 21% with probability .5
Suppose the investor's utility function is given by U(x) = ln(x) where x is the wealth after investing (assume she is investing for just one period). How much will she invest in the risky asset?
The price elasticity of demand for gasoline measures the:
a. responsiveness of gasoline producers to changes in the quality of gasoline. b. responsiveness of customers to changes in the price of gasoline. c. responsiveness of consumer preferences to changes in the quality of gasoline. d. both a and c above.
Which of the following is a positive, as opposed to a normative, statement?
a. The US Department of Justice should allow a merger between AT&T and T-Mobile because it would have little effect on consumers. b. Antitrust laws should be used to prevent further concentration in the wireless telephone service market. c. The US Department of Justice sued AT&T to block its merger with T-Mobile. d. The wireless telephone service market is too highly concentrated.