The nominal interest rate is 7% and the real interest rate is 2.75%. What is the inflation rate?
A) 3.75%
B) 4.55%
C) 4.25%
D) 9.75%
C
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Technology reduces the average cost of production, so in the long run
i. perfectly competitive firms produce at a lower average cost. ii. the market price of the good falls. iii. firms with older plants either exit the market or adopt the new technology. A) i only. B) i and ii. C) iii only. D) i and iii. E) i, ii, and iii.
If the quantity output and average cost at that output level are known, then it is possible to determine marginal cost for that output level.
Answer the following statement true (T) or false (F)
For purposes of calculating the CPI, the transportation category of consumer spending includes the cost of
a. subways. b. gasoline. c. both subways and gasoline. d. neither subways nor gasoline.
Suppose a tax of $3 is imposed on each new garden hose that is sold, resulting in a deadweight loss of $22,500 . The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. Before the tax was imposed, the equilibrium quantity of garden hoses was 100,000 . We can conclude that the equilibrium quantity of garden hoses after the tax
is imposed is a. 75,000. b. 85,000. c. 90,000. d. 95,000.