A firm produces 500 units per week. It hires 20 full-time workers (40 hours/week) at an hourly wage of $15 . Raw materials are ordered weekly and they costs $10 for every unit produced. The weekly cost of the rent payment for the factory is $2,250 . How do the overall costs breakdown?
a. total variable cost is $17,000 . total fixed cost is $2,250; total cost is $19,250
b. total variable cost is $12,000 . total fixed cost is $7,250; total cost is $19,250
c. total variable cost is $5,000 . total fixed cost is $14,250; total cost is $19.250
d. total variable cost is $5,000 . total fixed cost is $2,250; total cost is $7,250
a
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
If it's possible to eliminate the problems created by externalities, why do they persist?
A. The benefits of correcting the externalities generally exceed the costs. B. Correcting externalities would always reduce total surplus. C. It is difficult to measure external benefits and costs. D. None of these statements is true.
Suppose the market demand for good X is given by QXd = 20 - 2PX. If the equilibrium price of X is $5 per unit then consumers' expenditure on X is
A. $50. B. $25. C. $5. D. cannot be determined from the information contained in the question.