Which of the following is an example of a fixed cost for a fishing company?
a. The cost of hiring a fishing crew.
b. The fuel costs of running the boat.
c. The monthly loan payment on the boat.
d. The supply of nets, hooks, and fishing lines.
e. Bait.
c
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Compared to a fixed percentage reduction regulation, a tax on pollution encourages:
A. big firms to make larger reductions because they can more easily afford it. B. firms to reduce pollution by the same percent. C. firms that can more cheaply reduce pollution to make larger reductions. D. firms to use the same technology to reduce pollution.
The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point b could be the result of
A) an increase in technology. B) a decrease in the relative price of a soft drink. C) an increase in the relative price of a soft drink. D) an increase in the money price of a soft drink.
Green Duck Airways is considering adding a new flight between Portland and Seattle. Revenue from the flight is expected to be $8,000. The total cost of the flight is $9,500, and the variable cost is $4,000. Should the airline add this flight?
A. No, because the revenue of $8,000 is less than the cost of $9,500. B. No, the addition to profit is too small to devote the aircraft to the flight. C. Yes, profit increases by $4,000. D. Yes, profit increases by $2,500.
The modern synthesis view of fiscal policy stresses
a. how easy it is to time fiscal policy changes so they exert a stabilizing influence on the economy. b. the ineffectiveness of fiscal policy, even during periods of widespread unemployment. c. the difficulties involved in timing fiscal policy changes so they will exert a stabilizing impact on the economy. d. that automatic stabilizers do not help smooth fluctuations in the economy.