Which of the following is an example of a fixed cost for a fishing company?
a. The cost of hiring a fishing crew.
b. The fuel costs of running the boat.
c. The monthly loan payment on the boat.
d. The supply of nets, hooks, and fishing lines.
e. Bait.
c
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A reduction in the required reserve ratio would cause the interest rates to
A. increase only if the level of investment is low relative to historic levels. B. decrease. C. increase. D. increase only if the level of unemployment is high.
A firm that generates pollution is illustrated in Figure 9.7. If the government imposes a pollution tax equal to P2 and the firm chooses abatement level A3:
A. the marginal cost of abating is greater than the marginal benefit of abating. B. the marginal benefit of abating is greater than the marginal cost of abating. C. the firm is choosing optimally. D. the firm is in violation of environmental protection laws.