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 the profit maximizing sales price?
A. $47.70
B. $30.00
C. $45.00
D. $50.00
C. $45.00
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One of the strongest reasons that oligopolies exist is due to
A) the homogeneity of their products. B) marginal cost pricing. C) lowest cost production. D) economies of scale.
During a recession, unemployment insurance ensures that:
a. the disposable income of those who are unemployed will increase above the usual level. b. disposable income does not fall by as much as GDP decreases c. disposable income increases as GDP falls. d. the marginal propensity to consume increases. e. the marginal propensity to consume decreases.
Which of the following would cause the level of income to change by the greatest amount, ceteris paribus?
A. A reduction in personal income taxes of $10 billion. B. An increase in Social Security payments of $10 billion. C. An increase in defense spending of $10 billion. D. All of the other choices have equal impacts on the level of income.
The GDP deflator is the
A. difference between GDP and national income. B. price index used for the wholesale market. C. index used to measure deflation but not inflation. D. broadest-based price index available.