Explain which of the following count as money. a) a check in Ann's checkbook b) currency in Ann's bank c) currency in Ann's purse d) Ann's checking deposit
What will be an ideal response?
Only parts (c), currency in Ann's purse, and (d), Ann's checking deposit, are money. Ann's check, given in part (a), is a method of transferring money from Ann to someone else. Thus the check (itself) is not money. Part (d), the currency in Ann's bank, is not money until someone withdraws it because currency inside a bank does not count as money.
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Explain how a firm values the contribution of workers to its profitability. Would a profit-maximizing competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer
If some inputs of production do not vary with the level of output we call them fixed inputs which when multiplied by their price become fixed cost. Which of the following items typically fit this category?
A. Insurance payments B. Interest on loans C. Property taxes D. All of these are fixed costs
Shel and Fran are neighbors. They work at the same firm and hold the same title. Shel finds that when Fran's consumption rises, Shel feels worse off. Fran feels the same way about Shel's consumption. Suppose the firm that employs both Fran and Shel begins to offer one hour of overtime at 1.5 times their base hourly wage. It is likely that:
A. Fran will work more but not Shel. B. both Fran and Shel will work more. C. Shel will work more but not Fran. D. neither Fran nor Shel will work more.
On any given day we know a salesman can earn $0 with a 40% probability, $100 with a 20% probability or $300 with 40% probability. His expected earnings equal
A) $0. B) $140. C) $300. D) It cannot be determined from the available information.