If an additional dollar spent on monitoring would reduce shirking by 10 minutes, then the firm will increase the worker’s wage by $1 if this caused A) shirking to increase by less than 10 minutes. B) shirking to decrease by more than 10 minutes. C) shirking to decrease by less than 10 minutes. D) monitoring […]
Date: September 9th, 2020
The above figure shows the market for crude oil. If the oil exploration firms convince the government to set a minimum price of $4 per barrel, then A) 100 barrels of crude oil will be sold at $4. B) zero barrels of crude oil will be sold. C) zero barrels of crude oil will be […]
Date: September 9th, 2020
A Consumer Price Index adjustment overcompensates for inflation because it ignores A) the income effect when relative prices change. B) the substitution effect when relative prices change. C) that some goods are inferior. D) that the substitution effect may offset the income effect. ANSWER B
Date: September 9th, 2020
An electricity provider charges consumers $0.20 per kWh for the first 100 kWh, $0.25 per kWh for the next 50 kWh, and $0.27 per kWh for all subsequent kWH of usage. This would be considered A) an antitrust violation. B) an example of increasing-block pricing. C) bad business practices. D) an example of three-part pricing. […]
Date: September 9th, 2020
When total revenue reaches its peak (elasticity equals 1), marginal revenue reaches A) 1. B) zero. C) -1. D) Cannot be determined from the information provided ANSWER B
Date: September 9th, 2020
In Table 1, Tony’s income elasticity of demand for steaks is A) 1.0. B) greater than 1.0. C) less than 1.0. D) zero. ANSWER B
Date: September 9th, 2020
In the short run, which of the following would indicate that a perfectly competitive firm is producing an output for which it is receiving a normal profit? A) P > AC B) AVC < P < AC C) P = AC D) P = AVC ANSWER C
Date: September 9th, 2020
When a monopoly is maximizing its profits, A) MR > MC. B) MR < MC. C) dMR/dQ > dMC/dQ. D) dMR/dQ < dMC/dQ. ANSWER D
Date: September 9th, 2020
In the short run, the point at which average cost is minimized, the line from the origin to the point on the A) total cost curve is tangent to the curve. B) total cost curve has the largest slope. C) total variable cost curve has the largest slope. D) total variable cost curve has the […]
Date: September 9th, 2020
A firm that seeks to maximize its revenue is most likely to adhere to which of the following? A) MR = MC B) MR = 0 C) MR = P D) MR < MC ANSWER B
Date: September 9th, 2020
