Suppose Sam's Shoe Co. makes one kind of shoe. An example of a variable cost for this company would be:
A. the lease to the factory building.
B. the leather needed to make the shoes.
C. the design pattern for the shoes.
D. All of these are examples of variable costs.
Answer: B
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Assume a firm is a monopoly and enjoys $10,000,000 profits per year. The firm lobbies to have a moratorium passed by Congress on new firms in its market for the next 25 years
If there is no discount rate, how much would any firm(s) arguing against the moratorium be willing to spend to block it? A) something less than $250 million B) $250 million C) $251 million D) $250 billion
If a consumer is maximizing his/her utility for a given income, the:
a. marginal utility for every good purchased would be the same. b. marginal utility per dollar spent for all goods would be the same. c. marginal utility per dollar for all goods would be at a maximum. d. total expenditure on each good would be the same. e. number of units of each good consumed would be the same.
An agreement between the dominant firm and the fringe members to keep output low often breaks because:
a. the fringe firms usually appropriate a larger share of the profits. b. the agreement is not self enforcing. c. the dominant firm usually appropriates a larger share of the profits. d. both have an incentive to charge a higher price for their output.
What impact did the National Industrial Recovery Act (NIRA) of 1933 have on industrial output?
a. Industrial output had been declining, but it stabilized during the months following passage of the NIRA. b. Industrial output increased sharply after the passage of the NIRA. c. Industrial output had begun to increase, but it fell sharply following the passage of the NIRA. d. Industrial output and employment declined during the months prior to passage of the NIRA, and the legislation was unable to stop the decline.