A perfectly competitive firm seeking to maximize its profits would want to maximize the difference between:
a. its marginal revenue and its marginal cost
b. its total revenue and its total cost.
c. its accounting revenue and its accounting cost.
d. its price and its marginal cost.
b
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The major advantage of the corporation is
a. limited liability for owners. b. greater profit incentive than the other forms of business organization. c. lower taxes for owners, who are taxed only once. d. ability of owners to have hands-on management of the firm.
The value and cost of goods are easiest to determine when the goods are
a. private goods. b. public goods. c. common resources. d. club goods.
With respect to the consumer price index, which of the following does not serve as an example of how the substitution bias arises? Between 2010 and 2011, the price of a pound of peanuts
a. rises from $0.80 to $1.00 while the price of a loaf of bread rises from $2.00 to $2.50. b. rises from $1.00 to $1.30 while the price of a loaf of bread rises from $2.00 to $2.30. c. remains constant, while the price of a loaf of bread rises from $2.00 to $2.30. d. falls from $1.00 to $0.80 while the price of a loaf of bread falls from $2.00 to $1.80.
The nominal rate of interest is 3% and the anticipated rate of inflation is 4%. What is the real rate of interest?
A) 1% B) -1% C) 4% D) 9%