Acme Home Builders, Inc, has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25th house, its total cost will increase to $5.05 million. Which of the following statements is correct?
a. For the first 24 houses, the average cost per house was $205,000.
b. The marginal cost of the 25th house, if it is built, will equal $250,000.
c. If the company can sell the 25th house for at least $202,000 . then it should build it.
d. All of the above are correct.
b
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The one uncontroversial statement at the foundation of "supply-side" theory is that
A) cutting income tax rates raises the tax base by enough to increase tax revenues. B) income taxes reduce the after-tax reward to work and saving. C) reducing income taxes would significantly increase work effort. D) reducing income taxes would significantly increase personal saving.
In a floating exchange rate system, an increase in the value of the exchange rate could be caused by
a. an increase in taxes. b. an decrease in government spending. c. a decrease in the domestic money supply. d. a decrease in exports.
The individual demand curve that is implied by the budget constraints and indifference curves below will be:
A. Perfectly elastic
B. Relatively elastic
C. Perfectly inelastic
D. Relatively inelastic
Refer to the cost data given below. How much is the firm's total fixed costs?
A. $900
B. $500
C. $400
D. Cannot be determined from the given data