Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day.Number ofCakes Per DayTotal CostPer Day0$1001$1802$2203$3004$4005$5206$660If the market for wedding cakes is perfectly competitive, and wedding cakes sell for $125 each, then at her profit-maximizing level of output, Sarah's profit will be ________ per day.
A. $90
B. $625
C. $105
D. $100
Answer: C
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At the end of last year, the CPI equaled 120. At the end of this year, the CPI equals 132. What is the inflation rate over this year?
A) 6 percent B) 10 percent C) 12 percent D) None of the above answers are correct because more information is needed to calculate the inflation rate.
The natural rate of unemployment
a. increases sharply during a recession but declines significantly during a business expansion. b. is the unemployment rate accompanying the economy's maximum sustainable output. c. is generally less than the unemployment rate associated with the economy's full-employment rate of output. d. is present when the economy operates at approximately 94 percent of its potential GDP.
Figure 3-18
Refer to . Which area represents the increase in consumer surplus when the price falls from P1 to P2?
a.
ABD
b.
ACF
c.
DEF
d.
BCFD
In 2008, the Treasury and Federal Reserve took several actions in response to the deepening financial crisis. One action was that the Fed announced it would loan up to $200 billion of Treasury securities in exchange for
A) stock. B) mortgage-backed securities. C) corporate bonds. D) required bank reserves.