Individuals:
a. respond to incentives in predictable ways
b. decrease the level of an activity in response to negative incentives.
c. respond to positive incentives by increasing the level of activity.
d. do all of the above.
d
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An increase in the interest rate will: a. increase the amount of money supplied by lenders
b. decrease the amount of money supplied by lenders. c. have no effect on the amount of money supplied by lenders. d. have an ambiguous effect on the amount of money supplied by lenders.
The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000
Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Refer to the data. Creamy Crisp's total economic costs are: A. $286,000. B. $150,000. C. $94,000. D. $156,000.