Firms react to unplanned increases in inventories by
A. increasing output.
B. reducing output.
C. increasing consumption.
D. increasing planned investment.
Answer: B
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If robotics and factory automation become more widespread in an industry and all else is held constant
A. the demand for labor should decrease in that industry and the wage rate should increase. B. the demand for labor should increase in that industry and the wage rate should decrease. C. both the demand for labor in that industry and the wage rate should decrease. D. both the demand for labor in that industry and the wage rate should increase.
When MFC > MRP, a firm in a competitive market will
A) stop hiring. B) hire more workers. C) earn additional profits. D) layoff workers.
Say that the equilibrium price of natural gas would be $5 per thousand cubic feet, but there is a price floor imposed at $7 per thousand cubic feet. That price floor is then lowered to $5 per thousand cubic feet. As a result, a. the shortage of natural gas will get worse
b. the shortage of natural gas will get less severe. c. the surplus of natural gas will get worse. d. the surplus of natural gas will be eliminated.
Assume apples and oranges are substitutes. Suppose apple growers launch a successful advertising campaign that convinces consumers apples are a better product. As a result the cross-price elasticity of apples and oranges will become
A. More negative. B. Less positive (move closer to zero). C. More positive. D. Less negative (move closer to zero).