If TruLite's factory workers receive an hourly wage, described by the equation; Employee compensation = $5.00 + 0.10Q, where Q is the number of light switches installed per hour, then:
A. effort is unimportant in the performance evaluation system of the firm.
B. $5.00 is the basic incentive to produce.
C. Q is entirely dependent on random elements in the production system.
D. $0.10 is the incentive to increase effort.
Answer: D
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Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases: a. a surplus of lettuce will be created
b. a shortage of lettuce will be created. c. the quantity of lettuce traded remains the same. d. the quantity of lettuce supplied will increase.
Refer to the accompanying figure. What is total consumer surplus at the market equilibrium?
A. $80 per day B. $160 per day C. $6 per day D. $240 per day
A surplus will cause pressure on the price to fall.
a. true b. false
If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:
A. raise prices 1 percent. B. lower prices 1 percent. C. raise prices until the elasticity becomes very high. D. keep the price where it is.