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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Does a change in the real interest rate shift the supply of loanable funds curve? Explain your answer
What will be an ideal response?
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.
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.