A company that makes baseball caps is underutilizing its resources. What does this mean?
a) The company is running more efficiently than its competitors
b) The company is paying its employees less than it should be
c) The company is making caps when it could be making t-shirts instead
d) The company is producing fewer caps than it could be
Ans: d) The company is producing fewer caps than it could be
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If Joe buys a coffee at Starbucks, his money serves as a
A) unit of accounting. B) standard of deferred payment. C) store of value. D) medium of exchange.
Which of the following conditions is not necessary for a firm to be able to engage in price discrimination?
I. The firm must be able to produce to the point at which price equals marginal revenue. II. The firm must easily be able to identify consumers with different demand elasticities. III. The firm must be able to prevent resale of the item it produces and sells. A) I only B) III only C) Both I and II only D) Both II and III only
A technological advance that increases the marginal product of labor will
A. decrease the demand for labor. B. increase the supply for labor. C. decrease the supply for labor. D. increase the demand for labor.
Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:
A. importance of average labor productivity. B. diminishing returns to capital. C. limits of economic growth. D. power of compound interest.