Refer to Figure 2-10. If the economy is currently producing at point E, what is the opportunity cost of moving to point D?
A) 16 thousand spoons B) 26 thousand forks
C) 20 thousand forks D) 0 spoons
A
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Suppose that real GDP grows by 3 percent a year, the quantity of money grows 5 percent a year, and velocity does not change. In the long run, the inflation rate equals
A) 3 percent. B) 5 percent. C) 8 percent. D) 10 percent. E) 2 percent.
The ceteris paribus assumption is important in economics because
A) all empirical data are equal. B) it would be impossible to relate the effects of changes in one variable on another without holding some variables constant. C) economic data move very slowly over time and so they can always be considered constant. D) models are always complex and require as many variables as possible.
Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit and the firm is making an accounting profit of $3000 . What is the firm's total costs?
a. $10,000 b. $11,000 c. $12,000 d. $13,000
A competitive firm maximizes its profits (or minimizes is losses) by producing the quantity where the market price equals the firm's:
a. marginal cost. b. average total cost. c. average variable cost. d. average fixed cost.