Refer to Scenario 9.10 below to answer the question(s) that follow. SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.Refer to Scenario 9.10. In the long run, the cafe will want to
A. go out of business.
B. shut down but not go out of business.
C. operate and expand.
D. operate but not expand.
Answer: A
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In the above figure, if the firm increases its output from Q2 to Q3, it will
A) reduce its marginal revenue. B) increase its marginal revenue. C) decrease its profit. D) increase its profit.
Purchases of which of the following goods would be dramatically reduced during a recession?
A) ink pens B) refrigerators C) gasoline D) tomatoes
U.S. firms can produce and sell electric fans for $25. The United States can also import electric fans from China at $40 each and from Canada at $45 each. Electric fans made in the United States, China, and Canada are identical. Currently, the United States imposes a 30% tariff on imported electric fans. For the United States, are there trade diversion losses, trade creation gains, or both as a result of the formation of NAFTA?
a. There are only trade diversions losses b. There are only trade creation gains. c. There are neither trade creation gains nor trade diversion losses. d. There are both trade creation gains and trade diversion losses.
M1 is a measure of
What will be an ideal response?