John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the accompanying table.Time cleaning windows (hours/day)Total number of windows cleaned0017211314416517 Should John spend a third hour cleaning windows?
A. Yes, because the additional amount he would earn is $6, which is better than earning nothing.
B. Yes, because the additional amount he would earn is $14, which is greater than his opportunity cost of $7.
C. No, because the additional amount he would earn is $6, which is less than his opportunity cost of $7.
D. Yes, because he would earn $28.
Answer: C
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The federal government budget has generally been in a deficit for the past several decades because
A) budget deficits promote full employment. B) every year during those decades was a recession year in which expansionary fiscal policy was called for. C) military expenditures were increased steadily throughout those decades. D) political pressure on Congress to increase taxes and to balance the budget were less effective than political pressure to increase expenditures.
When income taxes are ________ progressive, then output is ________ sensitive to price-level changes
A) more; more B) more; less C) less; more D) less; less
An imperfectly competitive firm has the following total cost curve: C = 100 + 4Q. What is average fixed cost equal to when Q = 10?
What will be an ideal response?
The perfect competitor can make a profit
A. only in the long run. B. only in the short run. C. in both the long run and the short run. D. in neither the long run nor the short run.