If total costs are $50,000 when 1000 units are produced, and total costs are $50,100 when 1001 units are produced, we can conclude that
A. average variable costs are $100.
B. marginal costs are $100.
C. average total costs are $100.
D. average fixed costs are $100.
Answer: B
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If fewer families choose to purchase medical insurance because of rising health insurance premiums, then:
A. the frequency of illness in the general population will fall. B. those who remain insured will tend to spend less on health care. C. those who remain insured will tend to have lower-than-average rates of illness. D. those who remain insured will tend to have higher-than-average rates of illness.
Refer to Figure 28-7. Consider the Phillips curves depicted in the graph above. The Fed announces its intention to decrease inflation from 10 percent to 5 percent per year, and it succeeds
If the assumptions of the rational expectations school hold true, and the Fed's announcement is credible, the rate of unemployment will be ________ in the short run. A) less than 5.5 percent B) 5.5 percent C) between 5.5 and 7.5 percent D) 7.5 percent
The nominal rate of interest tends to rise during time of inflation because
A. lenders require a higher rate in order to loan out money. B. borrowers are willing to pay a higher rate to obtain loans. C. loans are taken in "cheap" dollars but paid back in dollars of greater purchasing power. D. lenders require a higher rate in order to loan out money AND borrowers are willing to pay a higher rate to obtain loans.
Always Round Tire hires Plain Truth Advertising to write copy for its newspaper advertisements. Always Round has a demand for advertising of MB = 400 ?2S where S is the number of hours that Plain Truth works. If Plain Truth has a fixed supply cost given by MC = $150 per hour, what are the number of hours that Always Round purchases from Plain Truth under the assumption of costless monitoring? How much is the contract worth to Always Round? If Always Round offers half of the surplus to Plain Truth as an incentive, how much is Plain Truth paid for the job?
What will be an ideal response?