Happy Bagels sells its bagels for $6 each and the firm has a constant marginal cost of $4 per bagel, which is equal to its (constant) average total cost. If Happy Bagels does not sell a bagel the day it is produced, the bagel is sold as day-old for $2. If Happy Bagels is currently holding 50 bagels in inventory and the probability that Happy Bagels will sell 50 bagels or more is 0.60, which of
the following statements is true?
A) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to increase its inventory.
B) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to decrease its inventory by exactly one -half.
C) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to decrease its inventory.
D) Happy Bagels is holding the profit-maximizing, optimal level of inventory.
A) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to increase its inventory.
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Although open market operations and discount loans both change the monetary base, the Fed has
A) greater control over open market operations than over discount loans. B) greater control over discount loans than over open market operations. C) very little control over either discount loans or open market operations. D) complete control over both discount loans and open market operations.
Which of the following individuals serve a four-year term?
a. the members of the Board of Governors b. the Chair of the Board of Governors c. the members of the FOMC d. All of the above are correct.
Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1, what changes in the market would result in an economically efficient output?
A) The price would increase, the demand would increase, and the supply would decrease. B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. C) The price would increase, the quantity supplied would increase, and the quantity demanded would decrease. D) The price would increase, quantity demanded would increase, and quantity supplied would decrease.
Consider the following types of demand curves:
a. a vertical demand curve b. a horizontal demand curve c. a linear downward-sloping demand curve Which of the demand curves listed exhibits a price elasticity of demand coefficient that remains constant along the demand curve? A) a only B) b only C) a and b only D) a, b, and c