Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service
Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price?
A) If Jason raises his price he would lose all his customers.
B) He would lose some but not all his customers.
C) Initially, his customers might complain but over time they will come to accept the new rate.
D) If Jason raises his price, then all others supplying the same service will also raise their prices.
A
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What effect would a simplification of federal tax law have on the cost of hiring a tax accountant?
A) It would fall because tax accountants would have fewer valuable opportunities. B) It would rise because tax accountants would have to raise their prices to maintain their incomes. C) It would have no effect because only supply affects costs, not demand. D) It would have very little effect because most of the costs of becoming an accountant are sunk costs.
The velocity of circulation is
A) the relationship between income and spending. B) the relationship between increases in income and investment. C) the ratio of currency to demand deposits. D) the average number of times per year a dollar is spent on goods and services in GDP.
Macroeconomic variables that the Fed cannot control directly but can influence fairly predictably, and which are related to the Fed's goals, are known as
A) instruments. B) tools. C) intermediate targets. D) initial targets.
Suppose a firm has an output of 10,000 cans and a total fixed cost of $2,000 . At an output of 5,000 the difference between the total cost and the total variable cost is
a. 5000 cans b. $0.40 c. the average fixed cost d. $2,000 e. $0.20