A firm might choose to produce its own inputs if:
A. specialized investment is not important.
B. spot markets for the input exist.
C. the exchange environment is not complex.
D. long-term contracts are costly to write.
Answer: D
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If, at a firm's projected sales level, the marginal cost is $125, the average cost is $150 and the markup is 20 percent, then its selling price is
A) $125. B) $150. C) $165. D) $180.
If the entire output of a market is produced by a single seller, the firm
A. Is a monopoly. B. Is producing a new product. C. Faces perfectly inelastic demand. D. Can charge any price it wants and not lose customers.
An economy is better off with an increase in the stock of capital.
Answer the following statement true (T) or false (F)
For a fixed resource like land to be allocated to its highest valued use
a. a good social plan is needed. b. it should be allocated to those who will pay the most. c. it should be taxed at 100 percent of its rental value. d. it should be offered to those who promise to put it to its best use.