Jay owns a classic car he purchased for $50,000. At a car rally a knowledgeable classic car enthusiast offers him $75,000 for the car. Based on this information:
A. Jay's wealth is unchanged.
B. Jay's saving this year has increased by $25,000.
C. Jay has experienced a $25,000 capital gain.
D. Jay's saving this year has decreased by $25,000.
Answer: C
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How does a negative externality in production reduce economic efficiency?
What will be an ideal response?
When the economy is operating at the equilibrium level of GDP, we know that
A) total planned real consumption expenditures equal real GDP. B) planned real investment spending equals real net exports of zero. C) total planned real expenditures equal real GDP. D) real net exports equal inventory changes.
The aggregate demand curve shows
A) a direct relationship between changes in the price level and changes in real GDP. B) real GDP does not change as the price level changes. C) an inverse relationship between the price level and real GDP. D) an inverse relationship between changes in the price level and changes in nominal GDP.
Suppose you are the marketing manager for Fruit of the Loom. An individual's inverse demand for Fruit of the Loom women's underwear is estimated to be P = 25 ? 3Q (in cents). If the cost to Fruit of the Loom to produce an item of women's underwear is C(Q) = 1 + 4Q (in cents), compute the profit Fruit of the Loom will earn by charging the optimal block price.
A. $1.37 B. $108.50 C. $136.50 D. $0.73