Suppose a company that produces furniture wax branches out into producing a dusting product like Lemon-Dust-Away. If this expansion is efficient, the company must
a. benefit from vertical integration
b. benefit from horizontal integration
c. experience economies of scale
d. experience economies of scope
e. have no transaction costs
D
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Changes in the money supply growth rate
A) are neutral in the short run. B) need not be neutral in the short run. C) are neutral in the long run. D) need not be neutral in the long run. E) affect the real output of the economy.
Refer to the normal-form game of advertising shown below.Firm AFirm B??AdvertiseDo Not Advertise?Advertise$0,$0$175,$10?Do Not Advertise$10,$175$125,$125Suppose there is a 10 percent chance that the advertising game depicted in Figure 10-17 will end next period. What is the present value to firm A of agreeing to the strategy {do not advertise, do not advertise}?
A. $237.50 B. $125 C. $1,250 D. None of the answers is correct.
Suppose individuals decide to reduce their holdings of money market funds. Further assume that these decisions put funds into checkable deposits. Given this information, we know that
A) the demand for M1 would increase and the demand for M2 would decrease. B) the demand for M1 would decrease and the demand for M2 would decrease. C) the demand for M1 would increase and the demand for M2 would increase. D) the demand for M1 would decrease and the demand for M2 would increase. E) none of the above
For a given benefit, a rational person chooses the option that has:
A. the average opportunity cost. B. the highest opportunity cost. C. the lowest opportunity cost. D. no opportunity cost.