In 1950, a phone call at a pay phone cost 5 cents and a first-class stamp cost 3 cents. Today, those prices are 50 cents and 49 cents respectively
What has happened to the price of each good relative to the other? What has happened to the price of each good relative to all other goods?
The price of a phone call has decreased relative to a stamp. In 1950, the price of a phone call was 1.67 stamps, and today the price is 50/44 stamp. The opposite is true for stamps. In 1950 the price of a stamp was 0.60 phone calls and today the price is 44/50 phone calls. We cannot tell what has happened to the prices of phone calls or stamps relative to all other goods without knowing what the money prices of all other goods were in 1950 and today. All we can say is that phone calls have either increased less than stamps or decreased more than stamps.
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Assume a firm is facing the following situation: At Q = 1,000, P = $10, MC = $10, ATC = $18, and AVC = $16. This firm should shut down and, in so doing, limit its losses to $2,000
Indicate whether the statement is true or false
Refer to Scenario 17.3. If there is no insurance and a fire protection program in place, the expected loss from fire for this company is
A) $0. B) $300. C) $3,000. D) $6,000. E) $300,000.
Suppose a player in a game has a dominant strategy, but they threaten to take another action. Can this threat be credible?
A) No, such threats are never credible to other rational players. B) No, if the player has a dominant strategy, they must take this action. C) Yes, if they can link the current game to another bargaining problem in which their joint strategy for the combined games is rational. D) Yes, dominant strategies may not always yield the highest payoffs.
Smith Barney, Charles Schwab, and Merrill Lynch are all primarily:
A. investment banks. B. mutual fund companies. C. insurance companies. D. securities firms.