For years Hugh R. Riskee enjoyed an 11% annual return on his S&P 500 mutual fund index. Last year he decided to sell his mutual fund, and invest it all in the Nasdaq 100 mutual fund index, in which he enjoyed a 14% annual return
What percent below represents the rate of his economic profit? A) 3%
B) 11%
C) 14%
D) 17%
E) 25%
A
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Answer the following statement(s) true (T) or false (F)
1. Although a sales tax hurts both producers and consumers, their losses are fully offset by the benefits created by the tax revenues. 2. One effect of a tax is that output in the market which is taxed falls. 3. Even if total surplus is maximized, there is still a chance that there will be a deadweight loss. 4. When the Pareto criterion is used to choose between different policies, any recommendation requires unanimous agreement. 5. If the potential Pareto criterion rejects a policy change, then the efficiency criterion will reject it as well.
When the marginal product of labor rises
A) the marginal cost of production will exceed the average total cost. B) the marginal cost of production also rises. C) the average total cost of production also rises. D) the marginal cost of production falls.
The table below shows how the marginal benefit of car washes varies for Carol with the number purchased per month.Car washes per monthMarginal benefit of purchasing an additional car wash1$6.002$5.003$4.004$3.005$2.00The price of each car wash is reduced from $2.99 to $1.99. Assuming that the price of a car wash accurately reflects the marginal cost to Carol and that she is rational, she will increase the number of car washes purchased per month from:
A. one to two. B. two to three. C. three to four. D. four to five.
Compared to pure competition, monopolistic competition:
A. provides greater product differentiation at the cost of some excess capacity. B. offers less product differentiation but attains equal productive efficiency. C. offers less product differentiation and lower productive efficiency. D. provides greater product differentiation and achieves greater productive efficiency.