When a firm faces a downward-sloping demand curve, marginal revenue
A) must exceed price because the price effect outweighs the output effect.
B) is less than price because a firm must lower its price to sell more.
C) equals price because the firm sells a standardized product.
D) must exceed price because the output effect outweighs the price effect.
Answer: B
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The short run is a period of time in which
A) the quantity of at least one factor of production is fixed. B) the amount of output is fixed. C) prices and wages are fixed. D) nothing the firm does can be altered.
If the underground economy is sizable,
Which of the following is an example of an efficiency wage?
a. a higher wage paid to a more experienced worker b. a below-equilibrium wage paid by a small business exempt from minimum-wage laws c. an above-equilibrium wage paid by a firm to reduce turnover costs d. a wage tied to participation in a government-sponsored job training program
Which of the following causes demand to be more elastic with respect to price?
A. Shorter periods of time to adjust to a change in price. B. A higher ratio of price to income. C. Fewer substitutes. D. A steeper demand curve for a given price and quantity.