A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000 . The firm's current fixed costs are $9,000 and current marginal costs are $15 . The firm currently charges $18 per unit. If the interest rate is 5% then the present value of the cash flows is

Which of the following is a fixed cost for Wendy's Hamburgers?

a. the cost of beef b. electricity to light up the Wendy's sign c. gasoline for the trucks that deliver supplies to the various franchises d. interest on funds borrowed to build new facilities e. expenditures on paper and plastic for packaging

The term "depreciation" in the national income accounts refers to

a. the adjustment of GDP for inflation. b. plant and equipment "used up" in producing current output. c. citizenship differences among income recipients. d. government transfer payments minus tax revenues.

What might cause economies of scale?

A profit-maximizing competitive firm wants to _____ the rate of output when price _____ marginal cost.

A.) Expand; exceeds B.) Reduce; exceeds C.) Expand; is less than D.) Reduce; equals