(Consider This) The story about artist Pablo Picasso illustrates the point that:
A. the demand for labor is a derived demand.
B. geographical immobility impedes an efficient allocation of labor resources.
C. principal-agent problems can occur in unusual settings.
D. present skills reflect past accumulations of human capital.
Answer: D
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Refer to Figure 9-3. With a quota in place, what is the quantity consumed in the domestic market and what portion of this is supplied by imports?
A) Domestic consumption equals 40 million pounds of which 22 million pounds are imports. B) Domestic consumption equals 34 million pounds of which 18 million pounds are imports. C) Domestic consumption equals 34 million pounds of which 16 million pounds are imports. D) Domestic consumption equals 28 million pounds of which 18 million pounds are imports.
In industrywide advertising, managers have an incentive to ________ and ________ for the advertising.
A) free -ride; not pay B) franchise; pay C) franchise; not pay D) free -ride; pay
Firms that face capacity constraints can increase output only up to the capacity, but no further. Therefore, firms
a. Should price to capacity as long as MR > MC b. Should price to capacity as long as MR = MC c. Should price to capacity as long as MR < MC d. Should not take capacity into consideration in pricing decisions
The base year for a price index is the year_____
a. in which prices were lowest b. in which prices were highest c. in which real output was the largest d. in which prices were stable e. that serves as a reference point