Suppose you are managing a 100 room hotel that has 5 empty rooms for tonight. The cost of operating your 100 room hotel for a night is $10,000 and the average cost is $100 per room. If the marginal cost of operating one room for one night is $30 and a customer is willing to pay $50 for the night, you should
a. rent the room because the marginal benefit exceeds the marginal cost
b. rent the room because the marginal benefit exceeds the average cost.
c. not rent the room because the marginal benefit is less than the marginal cost.
d. not rent the room because the marginal benefit is less than the average cost.
a
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Suppose that the U.S. interest rate is 5 percent and the Japanese interest rate is 1 percent. The effect of this difference in the foreign exchange market is that
A) financial capital stops moving. B) a Japanese investor is guaranteed to make an additional 4 percent in yen terms by investing in the United States. C) investors expect the yen to appreciate against the dollar. D) investors expect the yen to depreciate against the dollar.
According to Simon Kuznet's (1958) research, the pattern of immigration in 1865–1914
(a) showed long swings but not the short-term business cycle fluctuations. (b) showed no long swings in the 1820–1860 period, but did show the business cycle. (c) showed both business cycle patterns and long swing patterns. (d) unlike 1820–1860, showed neither short cycles nor long swings, but was instead a steady surge after the Civil War ended.
Which of the following is a consequence of the formation of a cartel? a. Output produced will be lower than the equilibrium output. b. Prices charged will be lower than the equilibrium price
c. Consumer surplus will increase. d. Products will be more innovative.
Under monopolistic competition, a firm's ability to influence the price of the product it sells arises because:
A. each seller sells a standardized product. B. the product of each seller is differentiated from that of others. C. sellers in the market have large market shares. D. sellers in the market have small market shares.