The monopolist that maximizes profit A) imposes a cost on society because the selling price is above marginal cost. B) imposes a cost on society because the selling price is equal to marginal cost. C) does not impose a cost on society because the selling price is above marginal cost. D) does not impose a […]
Date: September 9th, 2020
Suppose the plant owners design an incentive scheme for the plant manager in which the feasible production level is set equal to output from the previous quarter. The bonus payment is determined by the formula B = 0.2Qf + 0.2(Q – Qf). What potential problems can arise with this scheme? A) If Qf is unusually […]
Date: September 9th, 2020
Secondary workers are often decisive in keeping a family out of poverty. Indicate whether the statement is true or false ANSWER T
Date: September 9th, 2020
With respect to monopolies, deadweight loss refers to the A) socially unproductive amounts of money spent to obtain or acquire a monopoly. B) net loss in consumer and producer surplus due to a monopolist’s pricing strategy/policy. C) lost consumer surplus from monopolistic pricing. D) none of the above ANSWER B
Date: September 9th, 2020
The authors note that an appropriate discount rate for most U.S. households is near 5%. However, suppose you are considering the decision to attend graduate school, and you already have large credit card balances from your undergraduate years. If you decide to use a higher discount rate (e.g., 10%) to reflect your higher opportunity cost […]
Date: September 9th, 2020
The long-run supply curve in a constant-cost industry is linear and A) upward-sloping. B) downward-sloping. C) horizontal. D) vertical. E) could have any constant slope. ANSWER C
Date: September 9th, 2020
Refer to Scenario 13.16. If Gooi moves first, the payoff in equilibrium will be A) $150, $0. B) $150, $300. C) $400, $150. D) $50, $50. E) $650, $450. ANSWER C
Date: September 9th, 2020
Some firms provide stock options to managers as an incentive to work hard and increase the value of the firm. A typical option contract gives the manager the right to buy the firm’s stock at a set price (known as the exercise price). If the firm’s stock value increases and moves above the exercise price, […]
Date: September 9th, 2020
It is possible that class discrimination has become a stronger force in American society than racial discrimination. Indicate whether the statement is true or false ANSWER T
Date: September 9th, 2020
Knowledge, skills, and experience that make an individual more productive and able to earn a higher income are known as: A) mental capital. B) human capital. C) sweat equity. D) intangible capital. ANSWER B
Date: September 9th, 2020
