Suppose Jon Stewart of the "Daily Show" makes an annual income of $1,000,000. If he quit his television job and went into producing he could make $400,000 per year. Jon Stewart's annual economic rent to labor is
A) $1,400,000.
B) 1,000,000.
C) $400,000.
D) $600,000.
D
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Banks, like any other business, face a world of uncertainty and they either make a profit or suffer loss. If the losses become substantial, banks can fail and that occurs when
a. all of their loans are repaid and they cannot loan out their excess reserves b. the legal reserve requirement is raised and they have to curtail the amount of money they can lend c. a large proportion of their loans are not repaid (loans became bad investments) and depositors want more of their demand deposits than the bank has on hand d. excess reserves are greater than required reserves and banks have too much money in their vaults e. interest rates go so high banks are unable to make loans
Walter used to work as a high school teacher for $40,000 per year but quit in order to start his own painting business. To invest in his painting business, he withdrew $20,000 from his savings, which paid 3 percent interest, and borrowed $30,000 from his uncle, whom he pays 3 percent interest per year. Last year Walter paid $25,000 for supplies and had revenue of $60,000 . Walter asked Tyler the
accountant and Greg the economist to calculate his painting business's costs. a. Tyler says his costs are $25,900, and Greg says his costs are $66,500. b. Tyler says his costs are $25,000 . and Greg says his costs are $65,000. c. Tyler says his costs are $66,500, and Greg says his costs are $66,500. d. Tyler says his costs are $75,000 . and Greg says his costs are $41,500.
If Country A and Country B have the same population size, then the standard of living in these two countries can still be different depending on:
A. their respective political systems. B. the relative sizes of total output. C. their respective inflation rates. D. their relative geographic size.
Which of the following is NOT shown explicitly in the circular flow model?
A) the governments' purchases in the goods market B) the taxes the governments collect from households C) the governments' interaction with firms D) the legal system E) the transfers the governments make to households