If Tiger Toys faces a demand curve of P = 85 ? 0.25Q and a MC = ATC = 20, then the economic profits would be
A. $2,600.
B. $6,825.
C. $4,225.
D. $130.
Answer: C
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Inflation is a tax because as the government ________ the quantity of money, the price level ________, and the purchasing power of households' money ________
A) does not change; rises; increases B) increases; rises; increases C) decreases; falls; decreases D) increases; rises; decreases E) decreases; rises; decreases
With an interest rate of 6 percent, the present value of $100 next year is approximately
A) $106. B) $100. C) $94. D) $92.
High inflation can spiral out of control when
A) expected inflation increases nominal interest rates, causing the Fed to buy bonds, increasing the money supply and further increasing inflation. B) expected inflation decreases nominal interest rates, causing the Fed to buy bonds, increasing the money supply and further increasing inflation. C) expected inflation increases nominal interest rates, causing the Fed to sell bonds, increasing the money supply and further increasing inflation. D) expected inflation decreases nominal interest rates, causing the Fed to sell bonds, increasing the money supply and further increasing inflation.
The above figure shows three different supply-and-demand graphs. Which graph best represents the market for vacations on Mars?
A) Graph A B) Graph B C) Graph C D) None of the above