Of the two software options, complicated software, now costing $15.5 million with a probability of success at 50%, and the simplified software, with a probability of a success at 65%, which one would the firm choose to develop if it can develop only one?
a. The simple voice-activated software
b. The complicated thought-activated software
c. Neither of the software
d. Need more information
b
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A positive externality exists and government wants to apply a per-unit subsidy in order to bring about the socially optimal output. Under what condition will the solution (of the subsidy) be worse than the problem (the market failure)?
A. Under the condition that the subsidy is greater than the marginal external benefit (associated with the positive externality). B. Under the condition that the post-subsidy output is not farther away from the socially optimal output than the pre-subsidy output is from the socially optimal output. C. Under the condition that the post-subsidy output is farther away from the socially optimal output than the pre-subsidy output is from the socially optimal output. D. Under the condition that the subsidy is less than the marginal external benefit (associated with the positive externality). E. none of the above
The New Classical assumption of how quickly markets clear is actually most appropriate in the analysis of
A) the labor market. B) the aggregate good market. C) financial markets. D) the market for consumer durables.
Gradual adjustment of prices and wages to an increase in the aggregate demand curve implies that the aggregate supply curve is:
a. horizontal. b. vertical. c. upward sloping but not vertical. d. downward sloping.
When the government reduces its restrictions on immigration,
a. the prices of goods rise because the demand for goods increases b. immigration is reduced c. labor mobility is reduced d. wage differentials become narrower e. all workers are better off