Regulators employ average cost pricing instead of marginal cost pricing because
A. the price is lower with average cost pricing.
B. price must be high enough to cover all opportunity costs if the firm is to stay in business.
C. average cost pricing is more efficient than marginal cost pricing.
D. average cost pricing is simpler to compute than marginal cost pricing.
Answer: B
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Suppose a single-parent father with four children receives these welfare benefits from the government each month: $400 in cash, $200 in food stamps, and $100 in medical benefits
If the father takes a job paying $1000 per month he will lose all these benefits and will also pay $100 in income and social security taxes. His earnings from the job are consequently being taxed at an effective marginal rate of A) 80%. B) 60%. C) 40%. D) 20%. E) 10%.
If the money supply in an economy is $300, the price level is $4, and real GDP is $1,500, what is the nominal value of output?
a. $1,200 b. $4,500 c. $6,000 d. $180,000 e. $500
Which of the following are weaknesses of a command-based economic system?
a. It is not possible for goods to be allocated based on need rather than based on willingness and ability to pay. b. Producers have incentives to innovate because successful innovators are not rewarded with higher profit. c. Since price is set by central planners, price cannot freely adjust to resolve shortages or surpluses based on current supply and demand conditions. d. Answers b. and c. above are correct.
Consumption expenditures do NOT include purchases of
A. durable goods. B. services. C. nondurable goods. D. intermediate goods.