Walter used to work as a high school teacher for $40,000 per year but quit in order to start his own painting business. To invest in his painting business, he withdrew $20,000 from his savings, which paid 3 percent interest, and borrowed $30,000 from his uncle, whom he pays 3 percent interest per year. Last year Walter paid $25,000 for supplies and had revenue of $60,000 . Walter asked Tyler the
accountant and Greg the economist to calculate his painting business's costs.
a. Tyler says his costs are $25,900, and Greg says his costs are $66,500.
b. Tyler says his costs are $25,000 . and Greg says his costs are $65,000.
c. Tyler says his costs are $66,500, and Greg says his costs are $66,500.
d. Tyler says his costs are $75,000 . and Greg says his costs are $41,500.
a
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Refer to Table 18.1. M2 in this simple economy equals
A) $1,050. B) $4,050. C) $4,550. D) $5,100.
Suppose the current level of output is 5000 and the elasticity of output with respect to labor is 0.7. A 10% increase in labor would increase the current level of output to
A) 5035. B) 5070. C) 5350. D) 5700.
Which of the following statements is true?
A. The four phases of the business cycle, in order, are: peak, recovery, trough, recession. B. When unemployment is rising then real GDP is rising. C. The economic problem typically associated with a recovery is rising unemployment. D. Full employment exists in an economy when the unemployment rate equals the sum of frictional, and structural unemployment rates.
Medicare
A. subsidizes the care of middle aged people, which gives them an incentive to consume more medical services. B. subsidizes the care of older people, which gives them an incentive to consume more medical services. C. subsidizes the care of older people, which gives them NO incentive to consume more medical services. D. subsidizes the care of young people, which gives them an incentive to consume less medical services.