When the price of one good decreases, such as hot dogs, it may also increase the demand for other, related goods, like mustard.
Answer the following statement true (T) or false (F)
True
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Which of the following is an incorrect statement?
a. If for an activity MR>MC, then do more of it b. An incentive compensation scheme that increases MR will increase effort c. Fixed fees have no effect on effort d. Average cost is relevant to an extent decision
The argument that import restrictions save jobs and promote prosperity fails to recognize that:
a. there are no secondary effects of import restrictions. b. import restrictions will lower prices in the protected industries. c. import restrictions cannot create jobs in any industries. d. U.S. imports provide people in other countries with the dollars power required for the purchase of U.S. exports.
A monopoly is an inefficient way to produce a product because
a. it can earn both short-run and long-run profits. b. it faces a downward-sloping demand curve. c. the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. d. it produces a smaller level of output than would be produced in a competitive market.
A savings and loan strives for a 6% real return on its loans and estimates a 7% annual rate of inflation. It should therefore charge its borrowers a nominal interest rate of
A) 13%. B) 7%. C) 6%. D) 1.17%. E) 1%.