If the firm hires 5 workers, the average cost equals
a. $250
b. $50
c. $5
d. Need more information
b
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In Econland autonomous consumption equals 700, the marginal propensity to consume equals 0.80, net taxes are fixed at 50, investment is fixed at 100, government purchases are fixed at 100, and net exports are fixed at 40. The slope of the aggregate expenditures model line is
A. 0.90. B. 0.80. C. 0.20. D. 0.99.
Providers of health care insurance require applicants to provide information on their medical history. The purpose may be to minimize which of the following problems?
A) moral hazard B) adverse selection C) government taxes D) opportunity cost
The nominal interest rate is 3.5 percent and the inflation rate is 1.5 percent. What is the real interest rate?
a. 5.25 percent b. 5 percent c. 2.3 percent d. 2 percent
Ingrid has been waiting for the show "Mamma Mia!" to come to town. When it finally does come, tickets cost $60. Ingrid's reservation price is $75. But when Ingrid tries to buy a ticket, they are sold out. Suppose Steven was able to purchase a ticket at the box office for $60. Steven's reservation price for the ticket is $65. If Steven attends "Mamma Mia!" and Ingrid does not, then this situation is:
A. efficient because Steven arrived at the ticket counter before the show was sold out. B. inefficient because Ingrid would have enjoyed the show too. C. inefficient because Steven and Ingrid could have made a mutually beneficial trade. D. efficient because Steven paid less for the ticket than his reservation price.