If you receive $18 worth of pleasure from the first hole of golf played and your additional pleasure from succeeding holes drops $1 for each hole played, how many holes of golf would you play if you had to pay $2.10 per hole?
A. 9
B. 14
C. 12
D. 16
Answer: D
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If a firm’s marginal physical product is 5, and it sells its product for $60, and a unit of labor costs $200, the firm should
A. increase the use of labor. B. decrease the use of labor. C. decrease the price of the product. D. reduce output of the product.
In the Fixed Time Effects regression model, you should exclude one of the binary variables for the time periods when an intercept is present in the equation
A) because the first time period must always excluded from your data set. B) because there are already too many coefficients to estimate. C) to avoid perfect multicollinearity. D) to allow for some changes between time periods to take place.
Imagine an economy that does not have international trade and is initially in equilibrium. Later the government increases the level of spending by $350 million because it received a gift from abroad. In this economy, only 65 cents of every dollar is spent, and the rest is saved. Calculate the value of the spending multiplier for this economy
a. 2.86 b. 0.286 c. 1.54 d. 0.154 e. 0.35
Which of the following statements about a non-discriminating monopoly firm is correct?
a. It charges a price greater than its marginal cost. b. Its high prices generate inflation. c. It charges a price that maximizes its total revenues. d. As a price setter, it can ignore market demand. e. It has no incentive to produce each output level at the lowest possible cost.