Profits are maximized when
A) added costs are equal to added revenue.
B) costs equal revenue.
C) average costs equal average revenue.
D) economic profits are zero.
A
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Identify the four factors of production, and tell what type of income is earned by each factor
What will be an ideal response?
James has a utility of wealth schedule in the above table. He is offered a job selling video games at Games Galore. James' compensation depends on how much he sells. In a poor sales period, a salesperson makes $100 per month
In a good sales period, a salesperson makes $600 per month. James is told by the manager that, in any given month, there is a 25 percent chance of a poor sales period and a 75 percent chance of a good sales period. What is James' expected utility from taking this job? A) 100 B) 150 C) 175 D) 200
The federal funds rate is
a. determined in a market but targeted by the Fed. b. chosen by the Fed and enforced on the banks. c. chosen by Congress and enforced on the Fed. d. chosen by Congress and enforced on the banks. e. determined in the market and beyond the control of the Fed.
Suppose that during the last five years the rate of inflation was 3 percent each year and the money supply had grown 6 percent annually during the period. However, during the last nine months, the Fed has expanded bank reserves more rapidly and the money supply has been growing at a 12 percent annual rate. As a result, the expected inflation rate for the next period will be
a. higher than 3 percent under the rational expectations hypothesis. b. 3 percent under the adaptive expectations hypothesis. c. higher than 3 percent under both the adaptive and rational expectations hypotheses. d. both a and b.