Which of the following helps determine the growth rate of potential GDP? I. capital accumulation II. technology advances III. growth in the quantity of money
A) I
B) I and II
C) I and III
D) I, II and III
Ans: B) i and ii
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The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase.CPUGHzTotal BenefitMarginal BenefitTotal CostsMarginal Costs2.0$1,000 $900 2.5$1,400 &1003.0 $300$1,200 3.5$1,900 &1,500 4.0$2,000 &400The marginal cost of upgrading from a 2.5GHz to 3.0GHz computer is:
A. $200. B. $100. C. $400. D. $300.
Every profit-maximizing producer is cost minimizing.
Answer the following statement true (T) or false (F)
Which of the following would erode the monopoly pricing power of a firm that was controlling a market?
A. The development of substitutes for the product by other firms. B. New technology developed by the firm that lowered long run average costs. C. A tax on corporate profits. D. All of these would reduce the monopoly power of the firm.
If the nominal interest rate on a one-year loan was 7%, the expected inflation rate over the year was 3% and the actual inflation rate over the year turned out to be 3.5%, then the expected real interest rate equals
A. 3.75%. B. 4.0%. C. 3.5%. D. 6.5%.