In an economy where nominal incomes adjust equally to changes in the price level, we would expect the long-run aggregate supply curve to be:
a. vertical
b. horizontal.
c. unit elastic.
d. negatively sloped.
e. positively sloped.
a
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If a price searcher is producing at a level of output such that its marginal cost is $16 and its marginal revenue is $9, the firm should
a. increase output in order to reduce per-unit costs. b. decrease the price of its product and expand output. c. increase price and reduce its rate of output. d. reduce both price and output.
When we focus on the firm as a supplier of a good or a service, we assume that the firm is a profit maximizer. When we focus on the firm as a demander of labor, we assume that the firm's objective is to
a. minimize wages. b. minimize variable costs. c. maximize the number of workers hired. d. maximize profit.
Suppose Brazil has a comparative advantage in coffee production and Mexico has a comparative advantage in tomato production. If these two countries specialize and trade, which of the following is true?
A. Brazilian tomato producers are worse off. B. Brazilian coffee producers are worse off. C. Mexican tomato producers are worse off. D. Mexican coffee producers are better off.
Suppose a new cost-saving device will forever generate $1,000 net savings per year to a firm. The device costs $10,000. Using the Internal Rate of Return approach, will the firm make the investment?
A) definitely B) definitely not C) if the interest rate exceeds 10% D) if the interest rate is less than 10%