A firm wishes to shut down an office and fire 100 employees. The company will save $3000 per month per employee. It is estimated that each employee contributes $4,100 to the company. The firm rents office space for this group of employees at $1500 . What should the company do?
a. Fire the employees and save $1500 on rent
b. Not fire the employees keeping them generates a profit of $1100 per employee
c. Not fire the employees since keeping them generates a profit of $1085 per employee
d. None of the above
c
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Passive macroeconomic policy would rely on natural market forces and automatic stabilizers to close an expansionary gap
a. True b. False Indicate whether the statement is true or false
Regulation of industry is usually carried out by special government agencies that administer and interpret the law.
Answer the following statement true (T) or false (F)
The following figure shows the demand and cost curves facing a firm with market power in the short run.
The profit-maximizing level of output is
A. 60 units. B. 70 units C. 80 units D. 90 units. E. 100 units.
The kinked demand curve explains
A. How an oligopoly can achieve monopoly profits. B. The consequences of the interdependent behavior of oligopolists. C. Why oligopolists are more sensitive to cost changes than are competitive markets. D. Price-fixing along the elastic part of the demand curve and predatory pricing on the inelastic portion.