Recall the Application about choosing a price for drones based on a linear demand curve to answer the following question(s).Recall the Application. Suppose a firm that produces drones has a linear demand curve for its product, with a vertical intercept of $1,500. If the firm initially charged a price of $500 and then raised its price to $750, the firm's profit will ________.
A. increase
B. decrease
C. stay the same.
D. decrease until it becomes zero.
Answer: A
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When the economy slips into a recession, normally the demand for bonds ________, the supply of bonds ________, and the interest rate ________, everything else held constant
A) increases; increases; rises B) decreases; decreases; falls C) increases; decreases; falls D) decreases; increases; rises
Helga owns Viking, Inc, started with her $100,000 inheritance. Helga's accountant informs her that her firm earned a profit of $100,000 last year, and that if she chooses to invest the money she can expect a 10% return. If Helga did not run Viking, she would not work. What were Helga's economic profits last year?
a. Zero b. $100,000 c. $90,000 d. $95,000
Consider two goods - one that generates external benefits and another that generates external costs. The actual market outcome would
a. result in a price that is lower than the efficient price for both goods. b. result in a price that is higher than the efficient price for both goods. c. result in a price that is lower than the efficient price for the good with an external benefit and a price that is higher than the efficient price for the good with an external cost. d. result in a price that is higher than the efficient price for the good with an external benefit and a price that is lower than the efficient price for the good with an external cost.
A budget deficit occurs when government receipts exceed government spending
a. True b. False Indicate whether the statement is true or false