Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $28,000 a year
Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.
Jake's rent is a fixed cost. He is renting his land on a long-term lease and so the land is a fixed factor. The wages Jake pays are a variable cost. Labor is a variable factor so the wages are a variable cost.
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Credit cards were introduced in 1959. In 2014, the U.S. credit card balance was $880 billion. Which of the following is TRUE?
A) The $880 billion balance is part of M2 but not part of M1. B) The $880 billion balance is part of both M1 and M2. C) Only that portion of the $800 billion actually charged in 2009 is counted in M1 and M2. D) No part of the $880 billion balance is counted in M1 and M2.
A comprehensive retail sales tax is equivalent to a tax on income when _____
a. there is no deadweight loss from taxation b. there is at least some investment in the economy c. there is zero saving in the economy d. the economy is at full employment