Which of the following would not be considered a fixed cost for a law firm?
a. paper for the photocopy machine
b. property taxes
c. insurance premiums
d. license fees
e. interest on loans
A
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When the Fed buys a U.S. bond in the open market
A) its action contracts total reserves and the money supply. B) total reserves increase by the amount of the purchase but the money supply stays the same. C) its action expands total reserves and the money supply. D) its action has no effect on the total reserves or the money supply because the check it writes increases reserves at one bank but they fall at another.
A firm has two customers with non-identical demands and a constant marginal cost of production. At any positive price, the consumer surplus values for the two customers are related as CS2 ? CS1
What can we say about the optimal two-part tariff for the firm? A) The firm sets the price equal to MC and the optimal tariff is equal to CS2. B) The firm sets the price equal to MC and the optimal tariff is equal to CS1. C) The firm sets the price equal to MC and the optimal tariff is equal to zero. D) The optimal price is greater than MC and the optimal tariff is equal to CS1.