The high cost of advertising during the Super Bowl will
A) not affect the efficient level of output because advertising is a sunk cost.
B) will affect the efficient level of output because profits will fall significantly.
C) not affect the efficient level of output because advertising is a fixed cost.
D) Not enough information given.
A
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Corrina was working as a waitress in an Italian restaurant making an annual income of $25,000 per year when she decided to start up her own catering business. Corrina used $10,000 of her savings that was earning 5 percent annual interest to establish her
business. After the first year she made an accounting profit of $20,000. Her economic profit was A) -$5,550. B) -$5,000. C) $20,000. D) $25,000.
The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates. B. currency convertibility observed in most developing countries. C. domestic macroeconomic policy, arising from a shortage of international reserves. D. macroeconomic policy resulting from IMF conditionality.
The Ajax Manufacturing Company is selling in a purely competitive market. Its output is 100 units, which sell at $4 each. At this level of output total cost is $600, total fixed cost is $100, and marginal cost is $4. The firm should:
A. reduce output to about 80 units. B. expand its production. C. continue to produce 100 units. D. produce zero units of output.
Does a change in the real interest rate shift the supply of loanable funds curve? Explain your answer
What will be an ideal response?