The Santa Fe Spark Plug Company supplies spark plugs to automotive parts dealers. An increase in the demand for its product led Santa Fe to hire 150 new workers. Santa Fe also plans to expand the capacity of its plant but this project will take 2 years
to complete. Which of the following statements is true?
A) The wages and benefits paid to the new workers are implicit costs.
B) The long run for Santa Fe is longer than 1 year.
C) The short run for Santa Fe is 1 year.
D) In the short run Santa Fe's variable costs increase but its fixed costs decrease.
Answer: B
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GDP in a country grew from $10 billion to $14 billion over the span of 5 years. The percentage change in GDP was
A) 4%. B) 7%. C) 10%. D) 40%.
Labor productivity is calculated by dividing GDP by
A. population. B. the price level. C. capital stock D. labor force.
The equilibrium in the market for loanable funds is:
A. where the amount being saved is enough for banks to cover required reserves. B. at the price at which the quantity supplied is slightly greater than quantity demanded. C. where the amount being borrowed and the amount being saved is the same. D. at the interest rate set by the Fed.
The equation of exchange shows that
A) P = (M × V) ÷ Y. B) P = (V × M) × Y. C) P = (M ÷ V) × Y. D) P = (M × Y) ÷ V. E) P - Y = M + V.