The nominal price of milk was $2.25 in 1998 while the CPI was 163.0 that year. Also, the CPI in 1970 was 38.8. What was the real value of 1998 milk in terms of 1970 dollars?
What will be an ideal response?
38.8($2.25)/163 = $0.54.
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Suppose that a firm earned $500,000 in total revenue. At the same time, it incurred labor costs of $200,000; economic depreciation of $50,000; normal profit of $75,000; interest paid to the bank of $25,000; and used other factors of production that
cost $100,000. The economic profit earned by the firm equals A) $275,000. B) $175,000. C) $50,000. D) $200,000. E) $500,000.
Which of the following will bring about an inward shift of a production possibilities curve [PPC]?
a. A decrease in the amount of resource employment b. An increase in the working-age population c. An increase in unemployment d. A decrease in the availability of natural resources e. An increase in the amount of capital available
To the corporation, bonds are more risky than stocks because
a. interest rates fluctuate. b. bond interest is a fixed cost. c. investors prefer stocks to bonds. d. speculators manipulate bonds more than stocks.
Recall the Application about growth in China and India to answer the following question(s). From 1978 to 2004, China grew at a rate of 9.3 percent per year and India grew at a rate of 5.4 percent per year.According to this Application, China's growth rate was faster than India's during this 26 year period because:
A. China received more contributions from human capital than India received. B. China invested more in physical capital than India invested. C. China's growth was based more on human capital and India's growth was based more on physical capital. D. China's growth was based more on human capital and India's growth was based more on technological progress.