The table above gives the total cost information for Hank and Helen's cherry farm. They sell their cherries in a perfectly competitive market, where the price is $6.00 per pound. If Hank and Helen produce and sell 5 pounds of cherries, what is their total revenue?
Select one:
a. $30
b. $6
c. $20
d. $28
a. $30
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A social system could eliminate profits and losses if it could
A) eliminate greed and selfishness. B) eliminate uncertainty. C) fix all prices to reflect opportunity costs. D) fix all prices to reflect the value of the labor embodied in goods. E) tax all receipts above cost and redistribute them to firms unable to cover all their costs.
Reserve demand becomes horizontal at the IOER rate because:
A. the reserve supply is always set by the Fed so that the federal funds rate is greater than the IOER rate. B. banks will not make loans at less than the IOER rate. C. banks must earn more than the IOER rate to lend. D. the IOER rate is the upper bound of the target federal funds rate
Allocative efficiency occurs when
a. output is produced at minimum average cost b. the marginal benefit, that consumers attach to the final unit purchased, just equals the opportunity cost of the resources employed to produce that unit. c. new firms enter a perfectly competitive market d. the marginal benefit consumers attach to products purchased is maximized e. goods and services are sold in an English style auction market
Suppose the nominal interest rate is 7 percent annually, and you deposit $1,000. Inflation in the economy throughout the year is 7 percent. At the end of the year, you have earned:
A. an increase in your purchasing power. B. no increase in your savings. C. no increase in your purchasing power. D. a decrease in your purchasing power.