C. $1,000
$1 and average total costs of $3 when it produces 500 units of output. the firm's total fixed costs equal 1,000 dollars.
Answer:
Option D. Shut down because staying open would be more expensive.
Explanation:
The reason is that the total variable cost is lower than the total revenue which means the company can not reduce its variable cost so it is meaningless to produce the product. So the best option left is not to generate loss by simply shutting down the business.
Answer:
4) GDP will tend to increasingly understate the level of output through time.
Explanation:
The GDP includes all the final and legal goods and services produced within a country during a year, and underground economies usually involve illegal activities. Since the GDP does not include underground activities (e.g. unreported income, illegal drugs, prostitution, gambling, etc.), it will understate the true level of economic activity.
The GDP only includes activities that are subject to taxes, but some economists estimate that the size of the US underground economy is between $2.25 trillion to $2.46 trillion.
Answer:
Left by $400; Left by $300
Explanation:
Given that,
Marginal propensity to consume, MPC = 0.75
Government spending multiplier = 4
(a) If the government decreases its purchases by $100 million, then the magnitude of the shift in aggregate demand curve is calculated by multiplying the change in government spending to the government spending multiplier.
Aggregate demand curve shift left by
= Change in government spending × Government spending multiplier
= $100 × 4
= $400 million
(b) If the government increases income taxes by $100 million, then the magnitude of the shift in aggregate demand curve is calculated by multiplying the change in taxes to the tax multiplier.
Tax multiplier:
= MPC ÷ (1 - MPC)
= 0.75 ÷ (1 - 0.75)
= 0.75 ÷ 0.25
= 3
Aggregate demand curve shift left by
= Change in taxes × Tax multiplier
= $100 × 3
= $300 million
Answer:
-The right to convert the shares to common shares
-The right to redeem the preferred shares for cash
