Macy's spent $1 million to set up a customer surveillance system and spends $80,000 a year to maintain it. What would be the AVC and ATC of the system if it watched (a) 100,000 customers a year? (b) 1 million customers a year?
What will be an ideal response?
(a) AVC $.80; ATC $10.80 (b) AVC $.08; ATC $1.08
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The government of a country decides it long-run exchange rate and intervenes regularly in the foreign exchange market to keep the exchange rate at its fixed level. The country is most likely to have a ________
A) fixed exchange rate system B) dirty-float exchange rate system C) real exchange rate system D) floating exchange rate system
When production efficiency does NOT occur,
i. an economy is producing at a point within its PPF. ii. there are unemployed resources. iii. allocative efficiency cannot occur. A) i only B) i and ii C) iii only D) i and iii E) i, ii, and iii
The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient level of output
A) is achieved. B) can be achieved by giving paper producers a subsidy. C) can be achieved by imposing a Pigovian tax on paper producers. D) cannot be achieved.
Which of the following observations regarding the Gini coefficient (G) is incorrect?
a. If G is one, the Lorenz curve would overlap the line of perfect income equality. b. If G is zero, it represents perfect income equality c. If G is one, it represents perfect income inequality d. The closer G is to 1 the greater the degree of income inequality