Firms have an incentive to substitute labor for capital as the
A. price of capital decreases.
B. marginal product of labor decreases.
C. price of labor increases.
D. price of capital increases.
Answer: D
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Refer to the scenario above. Jack will derive ________ units of utility if both of them try to move the tree
A) 5 B) -5 C) -2 D) 10
Which of the following will happen if a firm in a duopoly with homogeneous products increases its price above its marginal cost once a Nash equilibrium is reached?
A) The firm will earn huge economic profits. B) The firm will gain market share. C) The firm will lose all its customers to its rival. D) The firm will continue to earn zero economic profits.
Jordan wants to sell her wedding gown for $250, but her cousin Jessica offered her $375 for it. If the gown is sold for $375, what is Jordan's producer's surplus
a. $125 b. $25 c. $625 d. $373 e. $250
Using Figure 1.4 above, we know the production of 9 units of soda and 3 units of pizza is 
A. possible, but there would be unemployment. B. impossible because we either do not have the resources or the technology. C. undesirable. D. possible, but only if all resources were fully employed.