Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares
A) the total revenue from sales of printers to the total cost of producing all the printers.
B) the extra revenue from selling a few additional printers to the extra costs of producing the printers.
C) the extra revenue from selling a few additional printers to the average cost of producing the additional printers.
D) HP's printers to printers from competing companies, such as Lexmark.
B
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According to the contract theory of wages, firms and workers agree on a contract that fixes
a. money wages. b. real wages. c. money wages and employment. d. real wages and employment.
What is one of the biggest differences between a sole proprietorship and a corporation?
A) Sole proprietorships offer stock. B) Corporation shareholders elect the managers of the firm. C) Sole proprietorships have limited liability. D) Corporations are the only profitable firms.
If demand is price elastic, then when price decreases, total revenue:
a. decreases. b. increases. c. does not change. d. is less than one. e. is negative.
Suppose a representative household holds a bond that is expected to pay a real return of $100 one year from now. However, over the next year, the inflation rate rises 15 percent more than was originally anticipated. As a consequence:
a. the real value of household wealth will increase. b. consumption spending will increase, and aggregate demand will rise. c. the purchasing power of money will rise. d. savings will fall and aggregate expenditures will rise. e. the aggregate expenditure in the economy will decrease.