Suppose the fixed cost of building a nuclear power plant is $1 billion. Suppose also that the only variable cost is the labor of Homer Simpson, and he earns $10 per hour. If the plant generates 1,000 kilowatts each hour, and has already generated 1 billion kilowatts, what can you say about the marginal cost of the next kilowatt?
A. The marginal cost is falling.
B. The marginal cost is equal to $.01.
C. The marginal cost is equal to $1.01.
D. The marginal cost is rising.
Answer: B
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The long-run average annual growth of real GDP per person is the United States is approximately ________ percent.
A. one B. seven C. five D. two
Horizontal integration allows firms to do all of the following except:
a. reduce administrative costs. b. create brand identity. c. take advantage of cost savings due to economies of scale. d. fully integrate with primary care clinics and acute care nursing facilities
The incentive of holding excess reserves is equal to
A. the interest rate earned on excess reserves. B. the federal funds rate. C. the discount rate. D. none of these.
Firms with market power must decide all of the following except
A. how to produce it. B. how much to supply in each input market. C. what price to charge for their output. D. how much to produce.