Sweet Treats sells its extra-large cupcakes for $10 each and the firm has a constant marginal cost of $6 per cupcake, which is equal to its (constant) average total cost. If Sweet Treats does not sell a cupcake the day it is produced, it is sold as day-old for $4. Sweet Treats should hold the number of cupcakes in inventory that makes the probability of selling that quantity of cupcakes or more
equal to ________.
A) 0.50 B) 0.66 C) 0.75 D) 0.33
D) 0.33
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A federal deficit of $300 billion means that
A) the government plans on collecting $300 billion in taxes this year. B) the government has a total debt of $300 billion. C) the government is spending $300 billion a year more than it is collecting in taxes. D) government spending is $300 billion a year.
Suppose a consumer's income increases from $30,000 to $36,000. As a result, the consumer increases her purchases of compact disks (CDs) from 25 CDs to 30 CDs. What is the consumer's income elasticity of demand for CDs?
A) 0.5 B) 1.0 C) 1.5 D) 2.0
Fractional reserve banking refers to a banking system in which
A. bank reserves are only a fraction of required reserves. B. bank reserves are only a fraction of total deposits. C. bank loans are less than bank reserves. D. bank deposits are less than bank reserves.
If the Congress passes legislation to increase government spending to counter the effects of a recession, then this would be an example of a(n):
A. expansionary fiscal policy. B. supply-side fiscal policy. C. nondiscretionary fiscal policy. D. contractionary fiscal policy.