Suppose that you took out a $1000 loan in January and had to pay $75 in annual interest. During the year, inflation was 6 percent. Which of the following statements is CORRECT?
A) The nominal interest rate is 7.5 percent and the real interest rate is 1.5 percent.
B) The nominal interest rate is 7.5 percent and the real interest rate is 13.5 percent.
C) The real interest rate is 7.5 percent and the nominal interest rate is 1.5 percent.
D) The real interest rate is 6 percent and the nominal interest rate is 7.5 percent.
A
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When a firm has maximized profits
A) it has also minimized total costs. B) the marginal product of each input is also maximized. C) the marginal physical product is greater than the input price for all inputs. D) its marginal cost is zero.
If a profit-maximizing, perfectly competitive firm is producing at a loss in the short run, then it implies that:
a. marginal revenue must be less than marginal cost. b. price must be less than the average variable cost. c. price must be less than average total cost but greater than average variable cost. d. the average revenue curve must lie below the average variable cost curve but above the average fixed cost curve. e. price must be less than both average variable cost and average fixed cost.
Susie has lost her job in a Vermont textile plant because of import competition. She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be available. We can say that Susie is faced with:
A. seasonal unemployment. B. cyclical unemployment. C. structural unemployment. D. frictional unemployment.
________ refers to a firm's ability to raise price without losing all demand for its product.
A. Price discriminating B. Price taking C. Market power D. Price gouging