Long-term contracts are LESS likely when:
A. specialized investments are important.
B. hold-up is likely.
C. workers are paid based on piece rates.
D. the exchange environment is complex.
Answer: D
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If marginal revenue exceeds marginal cost in the short run, the perfectly competitive firm earns an economic profit in the short-run
a. True b. False Indicate whether the statement is true or false
One of the principal factors behind the U.S. trade deficits of the 1990s has been
A. slow growth and recession in many important trading partners. B. rapid growth and inflation in many important trading partners. C. significant depreciation of the dollar. D. rising real interest rates in the United States.
When a firm competes in a competitive market with some market power, the profit maximizing level of employment occurs where?
a. MRP=MRC b. ATC=ATR c. VC=FC d. there is no optimal level of employment
Which of the following is the incorrect statement?
A. dB(Q)/dQ = MB. B. The marginal benefits curve is the slope of the total benefits curve. C. The slope of the net benefit curve is horizontal where MB = MC. D. The difference in the slope of the total benefit curve and the total cost curve is maximized at the optimal level of Q.