Suppose Kate's Great Crete (KGC) has annual variable costs of VC = 30Q + 0.0025Q2 and marginal costs of MC = 30 + 0.005Q, where Q is the number of cubic yards of concrete it produces per year. In addition, it has an avoidable fixed cost of $50,000 per year. KGC's demand function is Qd = 20,000 - 400P. What is KGC's profit at the profit maximizing sales price?
A. $30,000
B. $90,000
C. $120,000
D. -$30,000
D. -$30,000
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At the federal funds market equilibrium,
A) both the federal funds rate and the total quantity of reserves tend to rise automatically. B) both the federal funds rate and the total quantity of reserves tend to fall automatically. C) the equilibrium quantity of reserves demanded is equal to the equilibrium quantity of reserves supplied by the Fed. D) the equilibrium quantity of reserves demanded exceeds the equilibrium quantity of reserves supplied by the Fed.
Figure 2-7
Which of the following could explain the shift in the production possibilities frontier shown in from AC to AB?
a.
technical improvements in both petroleum and clothing production
b.
a productive improvement in clothing production that has no effect on petroleum production
c.
a decrease in the size of the labor force that can produce either petroleum products or clothing
d.
major oil reserves in Alaska are declared off-limits to producers in order to protect the environment
e.
major oil reserves are discovered off the coast of Africa
Suppose that initially the price is $50 in a perfectly competitive market. Firms are making zero economic profits. Then the market demand shrinks permanently, some firms leave the industry, and the industry returns to a long-run equilibrium. What will be the new equilibrium price, assuming cost conditions in the industry remain constant?
A. $50 B. Lower than $50, but exact value cannot be known without more information. C. $45 D. Larger than $45, but exact value cannot be known without more information.
Which of the following is an example of built-in stability? As real GDP decreases, income tax revenues:
A. Increase and transfer payments decrease B. Decrease and transfer payments increase C. And transfer payments both decrease D. And transfer payments both increase