Refer to Scenario 9.8 below to answer the question(s) that follow. SCENARIO 9.8: Investors put up $1,040,000 to construct a building and purchase all equipment for a new gourmet cupcake bakery. The investors expect to earn a minimum return of 10 per cent on their investment. The bakery is open 52 weeks per year and sells 900 cupcakes per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The bakery charges $8 on average per cupcake.Refer to Scenario 9.8. Total fixed costs per week are
A. $1,000.
B. $2,000.
C. $3,000.
D. $4,000.
Answer: D
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Refer to Figure 15-5. If the monopolist charges price P* for output Q*, in order to maximize profit or minimize loss in the short run, it should
A) continue to produce because price is greater than average variable cost. B) shut down because price is greater than marginal cost. C) continue to produce because a monopolist always earns a profit. D) shut down because price is less than average total cost.
The determinants of investment include the
a. level of technology, the interest rate, expectations of future economic growth, and the level of income b. level of technology, the interest rate, expectations of future economic growth, and the capacity utilization rate c. level of technology, the interest rate, the capacity utilization rate, and the level of income d. level of technology, the capacity utilization rate, expectations of future economic growth, and the level of income e. capacity utilization rate, expectations of future economic growth, the interest rate, and the level of income
A crowded beach without an entrance fee is a ________ good.
A. private B. public C. commons D. pure public
In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA
A) simply counts the total number of goods produced in the market place and then adds them up. B) values goods at their market prices, multiplies them by the quantity produced, and then adds them up. C) simply counts the total number of goods and services produced in the marketplace and then adds them up. D) values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.