Refer to Scenario 5.8. Given that the two outcomes are equally likely, Icarus Airlines' expected profit under complete information would be
A) $40 million.
B) $90 million.
C) $115 million.
D) $120 million.
E) $125 million.
C
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The process of adjustment to a new long-run equilibrium in a perfectly competitive industry is complete when
A. no firms want to enter or exit the industry. B. every firm has adjusted its production process to make the most efficient use of its resources. C. investors in the industry receive the standard economy-wide rate of return on their investments. D. All of the responses are correct.
If some people who were frictionally unemployed became structurally unemployed instead, the natural rate of unemployment:
a. Would increase b. Would not change c. Would decrease d. Would be affected in an unpredictable manner
The federal funds rate is a long-term interest rate banks charge one another for loans
a. True b. False Indicate whether the statement is true or false
The useful economic life of a machine depends most importantly on
a) the depreciation rate b) the interest rate c) the tax rate d) risk e) the marginal revenue produced by the machine