The market price for wallets is $20 . Your technology is such that at your most efficient production point, the average total cost of producing a wallet is $2.50 . Your manager runs into your office and shouts, "Boss! Average costs are rising! Average costs are rising!" To make a profit-maximizing decision, you should:
a. d or e.
b. immediately stop production.
c. completely ignore your manager.
d. ask the manager about the marginal cost.
e. ask the manager about the average total cost.
d
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A macroeconomic equilibrium occurs when the
A) quantity of real GDP demanded is greater than the quantity of real GDP supplied. B) quantity of real GDP demanded equals the quantity of real GDP supplied and both equal potential GDP. C) quantity of real GDP demanded equals the quantity of real GDP supplied even if they are not equal to potential GDP. D) quantity of real GDP demanded is less than the quantity of real GDP supplied. E) None of the above answers is correct.
On the graph above (and considering the short run only), a combination of a negative demand shock and a negative supply shock may be represented by the movement from point ________ to point ________
A) G; I B) H; F C) H; I D) G; F E) G; H
If a company's stock is perceived to be more risky than average, what will happen to their equity cost of capital? Explain using the capital asset pricing model
What will be an ideal response?
Other things the same, if the real interest rate in a country falls, domestic residents will desire to purchase
a. more capital goods and more foreign bonds. b. more capital goods but fewer foreign bonds. c. more foreign bonds but fewer capital goods. d. fewer capital goods and fewer foreign bonds.