For most firms in the economy, the largest part of factor costs is the cost of
a. labor.
b. capital.
c. property and machinery.
d. land and natural resources.
a
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When the price of a bagel rises from $0.45 to $0.65, the quantity of cream cheese demanded falls from 12,000 to 10,000 ounces per year. Use the midpoint formula to calculate the cross-price elasticity between bagels and cream cheese
What does the sign imply about the relationship between these two goods?
In discussions of barriers to entry, what is meant by the term "virtuous cycle"?
A) A virtuous cycle refers to successful research and development that leads to information that is used to develop other new products. B) A virtuous cycle refers to the situation where the pursuit of self-interest in establishing an entry barrier leads to an increase in social welfare (the "invisible hand"). C) A virtuous cycle refers to a situation where if a firm can attract enough customers initially, it can attract additional customers because its product's value has been increased by other customers using it, which attracts even more customers. D) A virtuous cycle refers to a firm using the profits from a monopoly in one market to establish a monopoly in another market.
"If it were not for the law of diminishing marginal returns, the world's wheat could be grown in a flower pot." Explain
If fears of a terrorist attack are widespread and people lose faith in money, the economy could revert to a system of
a. cash and checks. b. double-entry bookkeeping. c. barter. d. financial intermediaries.