Which of the following would be an example of a fixed cost to a firm?
A. wages for the laborers
B. electricity and other fuel costs
C. rent for the building it occupies
D. the cost of raw materials
Answer: C
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____ in taxes will decrease consumption spending, and ____ in transfer will increase consumption spending
Fill in the blank(s) with the appropriate word(s).
Relating to the Economics in Practice on page 362: The smart phone app which allows skiers at a slope to report weather conditions to others could be considered a form of
A. moral hazard. B. risk-loving. C. market signaling. D. asymmetric information.
When demand is inelastic and price? decreases:
A) the effect of the decrease in price on total revenue dominates the effect of the increase in quantity demanded on total revenue; overall total revenue declines.
B) the effect of the increase in quantity demanded on total revenue dominates the effect of the decrease in price on total revenue; overall total revenue increases.
C) the effects of the decrease in price on total revenue and the corresponding increase in quantity demanded on total revenue perfectly offset one another; overall total revenue remains unchanged.
D) quantity demanded and total revenue fall to zero.
Economists Milton Friedman and E.S. Phelps suggested that the apparent trade-off suggested by the Phillips curve could not be exploited by policy makers, because
A. unemployment levels and the inflation rate have a negative (inverse) relationship. B. economic participants are not rational, and therefore act unpredictably to any policy change. C. economic participants routinely incorporate changes in the inflation rate into their expectations. D. unemployment levels and the inflation rate have a clear, positive relationship.