Initially a firm pays a wage and gets an output per worker which are given index numbers of 1.00. Five possible 3 percent increases in the wage and the accompanying output per worker are as follows:
1.03 and 1.09, 1.06 and 1.17, 1.09 and 1.24, 1.13 and 1.29, 1.16 and 1.31. What is the efficiency wage?
A) 1.03
B) 1.06
C) 1.09
D) 1.13
E) 1.16
D
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If smartwatches are considered substitutes for smartphones, then the decline in the price of smartwatches would, all else equal
A) increase the demand for smartphones. B) decrease the quantity of smartphones demanded. C) decrease the demand for smartphones. D) increase the quantity of smartphones demanded.
In the short run, certain costs, such as rent on land and equipment, must be paid whether or not any output is produced. These are:
a. the firm's variable costs. b. the firm's break-even costs. c. the firm's sunk costs. d. the firm's marginal costs. e. the firm's fixed costs.
An efficient economy is one that produces what consumers demand and does so at the least possible cost.
Answer the following statement true (T) or false (F)
MegaCable and Acme are competing for an exclusive contract to provide the city of Dustin with cable television for the next year. The firm that wins the contract will earn an economic profit of $5 million. The contact will be awarded to the firm that spends the most on lobbying. If both firms spend the same amount on lobbying, then the winner will be determined by a coin flip, so each will have a 50 percent chance of winning. Suppose MegaCable spends $2 on lobbying, and Acme spends $1 on lobbying. In this case, MegaCable's economic profit net of its lobbying costs will be ________, and Acme's economic profit net of its lobbying costs will be ________.
A. $5 million; -$1 B. $4,999,998; -$1 C. 0; $5 million D. $2.5 million; $2.5 million