Happy Cows is a dairy farm that is currently earning $5,000 in economic profit. The managers of Happy Cows are considering adding a second dairy farm; however, the managerial diseconomies from adding the second farm cause Happy Cows current farm's economic profit to fall to $3,000. It is economically sound for Happy Cows to add the second farm if ________.
A) the second farm's economic profit is at least $1,500
B) the second farm's economic profit is at least $1,750
C) the second farm's economic profit is less than $2,000
D) the second farm's economic profit exceeds $2,000
D) the second farm's economic profit exceeds $2,000
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According to the misperceptions theory, the amount by which producers increase their output when the general price level rises depends on
A) the slope of the aggregate demand curve. B) the slope of the long-run aggregate supply curve. C) the size of the Solow residual. D) how much they think their relative prices have increased.
What happens when the Fed aims to change interest rates?
A) It asks Congress to legislate new interest rates. B) It buys or sells government bonds on the open market to achieve the desired rate. C) It buys or sells dollars on the foreign exchange market to achieve the desired rate. D) It announces a new discount interest rate.
The total revenue curve that corresponds to a downward-sloping linear demand curve
a. slopes downward b. slopes upward c. is a horizontal line d. first rises, then falls e. first falls, then rises
Scarcity is a concept that applies to all of the following except
a. time. b. natural resources. c. human wants. d. machinery.