Based on price setting behavior, which of the following will cause a reduction in the price level?
A) an increase in productivity
B) a reduction in the nominal wage
C) a reduction in the markup
D) all of the above
E) none of the above
D
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If a firm's average total cost is less than price where MR = MC
A) the firm should shut down. B) the firm should cut back on its output to lower its cost. C) the firm should continue to produce the output it is producing. D) the firm should raise its price.
A firm should hire more workers to increase its profits if
A) the marginal product of labor is greater than the wage the firm will pay these workers. B) there is enough capital and other resources for the workers to use. C) the demand for labor is elastic. D) the wage rate is less than the marginal revenue product of labor.
One response to increased oil prices, which reflects long-run elasticity and not short-run elasticity, is
a. gasoline rationing b. fewer joy rides c. shorter family vacations d. smaller cars e. less winter heat
Which of the following is not part of Hernando de Soto's The Other Path?
A. Improving infrastructure. B. Reducing taxes. C. Enforcing laws to safeguard private income. D. Encouraging the "underground" economy.