A needy family consisting of a mother and three children currently receives cash benefits that average $12 per day. The mother of this family is allowed to earn an average of $4 per day before her benefits begin to decline. After that, for each dollar earned, cash benefits decline by 67 cents for each dollar earned. Assume that she can find work at $4 per hour. How many hours will she have to work per day before her benefits are eliminated?
What will be an ideal response?
Cash benefits decline by $0.67 per dollar earned after she earns $4. Benefits decline $.067 *
$4 = $2.68 per hour worked after her first hour. Given that it would take 5.4776 hours, then her
cash benefits will be eliminated.
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Recall the Application. If the decrease in price of illegal drugs is due to equal changes in demand and supply, the equilibrium quantity of drugs
A) will increase. B) will decrease. C) will not change. D) may or may not change.
Which of the following describes the "invention" of banking?
A) Clergy in the Renaissance created the banking system to help further the growth of the church. B) Goldsmiths in the sixteenth century issued gold receipts which entitled its owners to reclaim their gold on demand. C) The United States government founded the Federal Reserve in 1913. D) The British Empire created a banking system to fund its exploration of the New World. E) Members of the New York Stock Exchange founded the Bank of America in the 1700s.
Refer to Figure 12-18. Use the figure above to answer the following questions
a. How can you determine that the figure represents a graph of a perfectly competitive firm? Be specific; indicate which curve gives you the information and how you use this information to arrive at your conclusion. b. What is the market price? c. What is the profit-maximizing output? d. What is total revenue at the profit-maximizing output? e. What is the total cost at the profit-maximizing output? f. What is the profit or loss at the profit-maximizing output? g. What is the firm's total fixed cost? h. What is the total variable cost? i. Identify the firm's short-run supply curve. j. Is the industry in a long-run equilibrium? k. If it is not in long-run equilibrium, what will happen in this industry to restore long-run equilibrium? l. In long-run equilibrium, what is the firm's profit maximizing quantity?
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.