What is the Degree of Operating Leverage?
What will be an ideal response?
It is an elasticity formula which calculates the percentage change in profit resulting from some percentage change in the level of operation (output and sales).
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Refer to Figure 18.2. After trade and specialization begin, the maximum amount of fishing poles that Macadamia can consume is
A) 40. B) 100. C) 120. D) 160.
If effective, a government-set price ceiling will lower equilibrium price and quantity in a market.
Answer the following statement true (T) or false (F)
Figure 9.3 represents the market for used refrigerators. Suppose buyers are willing to pay $300 for a plum (high-quality) used refrigerator and $100 for a lemon (low-quality) used refrigerator. If buyers believe that 50% of used refrigerators in the market are lemons (low quality), what fraction of used refrigerators sold will actually be lemons (low quality)?
A. 50/250 B. 50/300 C. 250/300 D. All of the refrigerators sold will be lemons.
Suppose that Congress allocates $5 billion to an "energy-efficient appliance rebate" program. It also raises taxes by $5 billion to keep the deficit from growing. If the marginal propensity to consume is 0.8, what is the effect on equilibrium GD
A) GDP does not change. B) GDP increases by $5 billion. C) GDP increases by $25 billion. D) GDP increases by $4 billion.