Mary Jane is willing to babysit for $6 an hour. Her neighbor has asked her to babysit for $8 an hour. Assuming Mary Jane accepts the offer:
A. her economic rent will be $2 per hour.
B. her consumer surplus will be $2 per hour.
C. her accounting profit will be $8 per hour, and her economic profit will be $0 per hour.
D. her economic profit will be $8 per hour.
Answer: A
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Answer the following statement true (T) or false (F)
You are considering whether you should go out to dinner at a restaurant with your friend. The meal is expected to cost you $50, you typically leave a 20% tip, and a round-trip Uber ride will cost you $15. You value the restaurant meal at $30 and the time spent with your friend at $50. You should ____ to dinner with your friend because the benefit of doing so is _____ than the cost.
A. go; less B. go; greater C. not go; less D. not go; greater
When the own price elasticity of good X is ?3.5, then total revenue can be increased by:
A. decreasing the quantity supplied. B. decreasing the price. C. increasing the price. D. neither increasing the price, decreasing the price, nor decreasing the quantity supplied.
The classical macroeconomic model argues that the economy has built-in forces that automatically eliminate unemployment and quickly move the economy to its full employment level of real GDP. Which assumption is critical to this argument?
A. Rigid wages and prices B. Flexible wages and prices C. Natural rate of unemployment D. Profit motive