Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each. What are Wanda's total economic profits?
a. $150
b. $126
c. $96
d. $54
c
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The purchase of foreign currency by a central bank will tend to cause ________
A) an appreciation of the domestic currency B) a depreciation of the domestic currency C) an increase in the value of foreign exchange, but no change in the value of the domestic currency D) a decrease in the value of foreign exchange, but no change in the value of the domestic currency
Regarding costs, accountants _____; economists _____
a. identify stable and predictable costs for decision-making purposes; measure costs for financial reporting purposes b. identify stable and predictable costs for financial reporting purposes; measure costs for decision making purposes c. do not include opportunity costs; include opportunity costs d. include opportunity costs; do not include opportunity costs e. both b and c f. both a and d
If the aggregate supply curve shifts leftward, then _____
a. the price level increases and output increases b. the resulting increase in the price level is usually called cost-push inflation c. the resulting increase in the price level is usually called demand-pull inflation d. the price level increases as long as the aggregate demand curve shifts rightward e. the price level decreases and output increases
If because they expect the central bank to disinflate, people reduce their inflation expectations, then is the sacrifice ratio larger or smaller the otherwise? Defend your answer by referring to the Phillips curve