Refer to Figure 12-4. If the market price is $30, should the firm represented in the diagram continue to stay in business?
A) No, it should shut down because it cannot cover its variable cost.
B) Yes, because it is making a profit.
C) No, it should shut down because it is making a loss.
D) Yes, because it is covering part of its fixed cost.
D
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At a fixed income level, an increase in consumption which is accompanied by a decrease in savings is reflected by
A) an upward rotation of the consumption function. B) an upward shift of the consumption function. C) a movement up along the consumption function. D) a downward rotation of the consumption function.
If Cassie's Coffee House purchases 42 cents worth of ingredients and spends 28 cents on wages per cup of coffee to produce an 89 cent cup of coffee, then Cassie's Coffee House's value added per cup of coffee is
A) 19 cents. B) 28 cents. C) 47 cents. D) 61 cents.