A consultant who earns $100 per hour takes four hours off work to go to the movies. The out-of-pocket cost for the cab and the movie ticket are $12 . The total cost of the movie to the consultant is
a. $12
b. $412
c. $400
d. $388
e. $112
B
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
IBM went to the trouble of adding five separate microchips to its F-series printers to slow them down and sell them as E-series printers for a lower price
How could any firm justify adding extra costs to production for a good that will carry a lower price tag?
If the government imposes a sales tax on a good with a relatively more inelastic demand, the _____
a. tax revenue collected by the government will be large b. tax revenue collected by the government will be small c. deadweight loss from the tax will be large d. tax burden on producers will be large
For a firm in monopolistic competition, innovation and product development are
A) senseless because economic profit is always zero in the long run. B) necessary in order to have a chance of earning at least a short-run economic profit. C) inconsequential because each firm produces a different product. D) necessary to allow new firms to enter. E) uncommon because other firms already produce similar products.