45 - Interest & Consumption

Investing $1 for 35 years at 4 percent per annum yields approximately $2.94 in interest. The cost of consuming$1 today is therefore ______ of consumption in 35 years' time. a) $2.94 b) $102.90 c) $3.94 d) $137.90 e) $1.94

52- Average cost

If it costs the firm $54 to produce 6 units of output and $40 to produce 5 units of output, average cost: a) is greater than marginal cost and average cost is rising b) is less than marginal cost and average cost is rising c) equals marginal cost d) is greater than marginal cost and average cost is falling e) is less than marginal cost and average cost is falling

60-

A firm generates total revenue of $80,000. Labor costs $40,000, materials cost $20,000 and the owner could have earned $15,000 working for someone else. To an economist, profit equals___________; to an accountant, profit equals ______________. a) $40,000; 5,000 b) $5,000; $40,000 c) $40,000; $15,000 d) $20,000; $5,000 e) $5,000; $20,000

68- Profit Maximization/Monopolies

A profit-maximizing monopolist finds that at the present level of output, marginal revenue equals $10 and marginal cost is $14. The price for this output has been determined from the demand curve. What action should the monopolist take to increase profits? a. reduce price and increase output b. reduce price and output c. increase price and output. d. increase output and reduce price e. increase price and reduce output

Economics

Peggy-Sue's cookies are the best in the world, or so I hear. She has been offered a job by Cookie Monster, Inc., to come to work for them at $125,000 per year. Currently, she is producing her own cookies, and she has revenues of $260,000 per year. Her costs are $40,000 for labor, $10,000 for rent, $35,000 for ingredients, and $5,000 for utilities. She has $100,000 of her own money invested in the operation, which, if she leaves, can be sold for $40,000 that she can invest at 10 percent per year. a. Calculate her accounting and economic profits. b. Advise her as to what she should do.