Suppose a firm manager has a base salary of $175,000 and earns 0.5 percent of all profits. Determine the manager's income if revenues are $10,000,000 and profits are $5,000,000.

The Great Recession of 2008-09 was an ideal case for fiscal policy because:

A. a healthy financial sector improves the timeliness of expansionary fiscal policy. B. targeting and timeliness are less important when a recession is the result of the bursting of an asset bubble. C. the most-easy-to-target sectors were those that were the most affected by unemployment. D. targeting and timeliness are less important when a recession is very severe and lasts a long time.

What happens when the price decreases in the case of a product that has elastic supply?

(A) Existing producers expand, and new producers enter the market. (B) Some producers produce less, and others drop out of the market. (C) New firms enter the market as older ones drop out. (D) Existing firms continue their usual output, but they earn less.