Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What does planned real saving equal when real disposable income equals? $12,000?
Real Disposable Income Planned Real Consumption
?$0 $3,000
?2,000 4,400
?4,000 5,800
?6,000 7,200
?8,000 ? 8,600
?10,000 10,000
?12,000 11,400
?14,000 ? 12,800
A) 0
B) 600
C) 3,000
D) 11,400
Answer: B) 600
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Of the following industries, which are perfectly competitive? For those that are not perfectly competitive, explain why
a. Restaurants b. Corn c. College education d. Local radio and television
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. John should:
A. expand, since he expects to earn $320,000 by expanding, and it will only cost him $150,000 to do so. B. not expand, because there is a chance John will earn the same as if he didn't expand and would be out the $150,000 investment. C. not expand, since he expects to earn $120,000 more by expanding than not, and it will cost him $150,000 to do so. D. expand, since he has a 70 percent chance of earning more than the cost of expansion.