If the demand for farm products is income elastic, that would mean that farm products were a necessity.
Indicate whether the statement is true or false
Ques. 2Two university graduates, Bill and Steve, worked for an advertising agency at an annual salary of 40,000 each for 3 years after they graduated. Then, they decided to quit their jobs and start a partnership that designs and builds Web sites.
They rented an office for 12,000 a year and bought capital for 30,000. To pay for the equipment, Bill and Steve borrowed money from a bank at an annual interest rate of 6 percent. During their first year of operation, the partners' total revenue was 100,000. The market value of their capital at the end of the year was 20,000. If Bill and Steve do not design Web pages, their best alternatives are to return to their previous job. a) What is the firm's economic depreciation? b) What are the partnership's costs? c) What is the firm's economic profit in the first year of operation?
Ques. 3Which of the following four firms would most likely be part of a monopolistically competitive market?
A) Lee, J Brand, Joe's Jeans, Paper Denim & Cloth, Levi's, and Wrangler are all producers of jeans.
B) Mark sells the tomatoes he grew in his backyard at the local farmers market.
C) The WaveHouse is the only place in San Diego where you can ride an indoor 10 foot wave.
D) Amara Massage is the only firm which specializes in pre- and post-natal massage.
Ques. 4A consumer will maximize utility when all income is spent and the marginal utility is equal for all goods.
Indicate whether the statement is true or false
Ques. 5Consider the country of Inland. In Inland, people's average tax rates decrease with the level of income. Inland has a ________ tax structure.
A) progressive
B) regressive
C) proportional
D) flat-rate
Ques. 6Economies of scope has to do with lowering production costs by increasing the quantity of a product produced, whereas economies of scale has to do with lowering production costs by producing several products within the same firm.
Indicate whether the statement is true or false
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