The Hound Dog Bus Company contemplates expanding its New Mexico operations by offering service from Raton to Milk-of-Magnesia. The total cost of the trip would be $400, of which $150 is fixed cost, which it has already paid. The firm expects to earn $275 in revenue from the trip. The Hound Dog Bus Co should
a. offer this service because it will earn a positive economic profit
b. not offer this service because the marginal revenue is less than the marginal cost
c. offer this service because the revenue exceeds fixed cost
d. not offer this service because the total cost exceeds the total revenue
e. offer this service because the added revenue exceeds the added cost of this service
E
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Conflicts can arise between divisions because
a. Coordination between divisions does not benefit all divisions equally b. managers of profit centers care too little about the effects of their decisions on other divisions c. managers are rewarded only for actions that increase their own divisional profit regardless of their effects on other divisions d. all of the above
When we say that money is fungible, we mean that a dollar spent out of your savings account:
A. is exactly the same as a dollar spent from your checking account. B. is earmarked for a purpose and can't be spent on everyday expenses like groceries. C. is not substitutable with any other dollar you have. D. is worth more than the dollar you have in your pocket.
The type of unemployment that occurs because of a recession is called:
a. frictional unemployment. b. seasonal unemployment. c. natural unemployment. d. cyclical unemployment.
Which of the following statements is TRUE for a monopolistically competitive firm in the long run?
A. P = MC = MR B. P = ATC > MR C. MC > P > ATC D. P > MC > ATC