Suppose two owners of a store agree to split the profit equally regardless of the number of hours each spends working at the store. As a result,
A) production efficiency is achieved.
B) each enjoys only half the marginal benefit of an additional hour working in the store.
C) one will work all of the time while the other works zero hours.
D) each will work as many hours as if he or she were the sole owner.
B
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If the price of gasoline increases and the price of food remains the same, then real income measured in terms of
A) gasoline increases. B) gasoline decreases. C) food increases. D) food decreases.
Discuss the different effects on the domestic interest rates when prices are assumed flexible and when they are assumed to be sticky
What will be an ideal response?
Describe the fractional reserve banking system
What will be an ideal response?
Which of the following statements regarding economic regulation is TRUE?
A) Economic regulation has failed by insisting that firms must be allowed to earn a normal rate of return. B) Rate-of-return regulation has been much more effective than cost-of-service regulation. C) Economic regulation deals only with rates of return, and not with prices. D) Economic regulation deals mainly with prices firms charge, but firms can alter their return by altering quality of service, effectively raising the price per constant-quality-unit.