A firm has fixed costs
A) in the short run and in the long run.
B) in the short run but not in the long run.
C) in the long run but not in the short run.
D) neither in the long run nor in the short run.
Ques. 2Which of the following about corporations is TRUE?
A) The cost of capital and labor is high relative to that paid by a proprietorship.
B) Profits are taxed only once as the owners' income.
C) The owners' entire wealth is at risk.
D) Corporations' profits are taxed independently of their owners' incomes.
Ques. 3An increase in a consumer's income creates a
A) rightward parallel shift of the budget line.
B) leftward parallel shift of the budget line.
C) rightward rotation of the budget line, so that the budget line becomes steeper.
D) leftward rotation of the budget line, so that the budget line becomes steeper.
Ques. 4Shaniq has seen two movies this week and two baseball games. Her marginal utility of one more movie is 20 and her marginal utility of one more baseball game is 30. Shaniq will go to a baseball game tonight, rather than to another movie
A) no matter how much more the baseball game costs compared to the movie.
B) if the baseball game costs 10.00 and the movie costs 7.00.
C) if the baseball game costs 10.00 and the movie costs 5.00.
D) Both answers B and C are correct.
Ques. 5If the price level in Great Britain increases from 102 to 105 (holding all else constant), real wealth ________ and there is a movement ________ along Great Britain's aggregate demand curve.
A) decreases; upward
B) increases; upward
C) decreases; downward
D) increases; downward
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