Which of the following is considered a firm's "factor of production"?
A. Money or cash balances of the firm
B. The firm's shares of common stock
C. U.S. Treasury bonds owned by the firm
D. The office building occupied by the firm
Answer: D
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Define the terms "economies of scale," "constant returns to scale," and "diseconomies of scale." Among these three situations, operating in which stage is likely to be most profitable for a firm?
What will be an ideal response?
Marking to market involves
A) changing the futures price to the spot price each day. B) engaging in arbitrage so as to reduce the risk involved with futures contracts. C) crediting or debiting the margin account based on the net change in the value of the futures contract. D) updating the futures price after the market closes each day.
Suppose we advertise up to the point where the last dollar spent on advertising generates an additional dollar of sales revenue (i.e, the marginal revenue of advertising equals one)
If the full marginal cost of advertising is greater than one, then we will generate: A) less output than the profit maximizing level. B) more output than the profit maximizing level. C) the profit maximizing level of output. D) We don't have enough information to answer this question.
If Big Box Store has customers with identical demands, if it practices two-part pricing, the profit-maximizing access fee is ________ the consumer surplus.
A) less than B) greater than C) exactly double D) equal to