Suppose that a lawn mowing services production function for lawns mowed in a week is M = (LK)1/2, where L is labor hours and K is the amount of capital (mowers and trimmers). The expansion path depends on
a. the wage rate only.
b. the rental rate only.
c. both the wage and rental rates.
d. neither the wage nor rental rates.
c
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Shirking is most likely to occur when
A) the principal monitors the agents extensively. B) employees are paid an hourly wage. C) a piece rate contract is used. D) an assembly line is used for production.
Behavioral mechanism design economists face which of the following problems when solving policy issues?
A. How to find the right combination of social and moral incentives but without considering prices B. How much mathematics to include in the model, an issue only behavioral economists face C. How to convince people that their approach to policy issues will work, an issue only behavioral economists face D. How to find the right combination of market, social, and moral incentives that will achieve a goal
For many corporations, a major portion of the cost of production is fixed in the short run. Should these very large fixed costs be ignored when the executives are making output and pricing decisions? Why?
What will be an ideal response?
Which of the following is correct? A tax burden
a. falls more heavily on the side of the market that is more elastic. b. falls more heavily on the side of the market that is less elastic. c. falls more heavily on the side of the market that is closest to unit elastic. d. is distributed independently of the relative elasticities of supply and demand.