A recent article suggests that the introduction of the new iPhone 6 increased the demand for iPhone protective cases. The article suggests that these two goods are
A) substitutes and their indifference curves are close to being straight lines.
B) complements and their indifference curves are close to being straight lines.
C) substitutes and their indifference curves are close to being L shaped.
D) complements and their indifference curves are close to being L shaped.
D
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In the table above, if the cost of capital is $20 per day and an hour of labor is $15 per day, which method is economically efficient?
A) A B) B C) C D) D
Tax preferences create more _____ than a broad-based income tax because they change the relative prices to the taxpayer of earning different types of income
a. welfare loss b. benefits c. taxable income d. tax avoidance
Government actions that create monopolies
A) spur product innovation by the monopoly. B) create deadweight loss. C) result in lower average costs of production. D) ensure that firms price at marginal cost.
Refer to the above table. Suppose the price of the good sold is $4 and the marginal factor cost of labor is $600, how many units of labor will the firm hire?
A) 4 B) 5 C) 6 D) 3