If a firm adopts a production process that is costly in order to reduce pollution, the result is
A. A decrease in the firm's ATC curve and an increase in the firm's profits.
B. An increase in the firm's ATC curve and an increase in the firm's profits.
C. A decrease in the firm's MC curve and a decrease in the firm's profits.
D. A decrease in the profit-maximizing rate of output and a decrease in the firm's profits.
Answer: D
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All of the following are true, except
a. Some consumers may infer high prices of a good to signal high quality b. Low prices can also signal high quality c. Promotional campaigns do not affect consumer's perception on quality d. It makes more sense to raise price when advertising makes demand less elastic
A person who is, all else equal, more willing to throw away a $20 shirt than a $200 shirt, even if both are worn out, is:
A. dynamically inconsistent. B. dynamically consistent. C. demonstrating sunk cost fallacy. D. demonstrating pre-commitment.
The marginal cost curve intersects the average total cost curve at its minimum point.
Answer the following statement true (T) or false (F)
Suppose a new employee is promised a pension payment of $8000 in the twenty-fourth year after joining the firm. The current pension contribution is $2000 a year. Assuming a six percent rate of return, this pension plan is said to be
A) fully funded. B) partly funded. C) unfunded. D) fully vested.