Pamela's bakery produces 500 loaves of bread in a given year. Pamela pays $100 for flour and yeast, pays $600 in wages, pays $50 in interest on an existing loan, and pays $100 in taxes to the government
One of Pamela's bread slicing machines, which cost $75 each, wears out over the course of the year and must be scrapped. Pamela's profit for the year equals $75. Pamela's bread, therefore, sells for A) $0.50 per loaf.
B) $1.00 per loaf.
C) $2.00 per loaf.
D) cannot tell, insufficient information
C
You might also like to view...
The typical movement of the aggregate supply curve resulting from an increase in productivity is that it
a. shifts inward and becomes flatter. b. shifts inward. c. shifts outward. d. becomes flatter. e. becomes steeper.
Crowding out is most likely to occur when the federal government:
A. Runs a surplus and pays off part of the debt. B. Balances the budget. C. Runs a deficit and raises taxes to generate more revenue. D. Runs a deficit and borrows money to finance its spending.