Suppose that a firm's capital equipment is expected to last indefinitely, that operating expenses on the equipment are negligible, and that the price of the firm's product is expected to remain constant in the future. Under these circumstances, the firm's marginal rate of return on investment is equal to capital's
a. marginal resource cost as a percentage of its marginal revenue product
b. marginal product as a percentage of its marginal revenue product
c. marginal revenue product as a percentage of its marginal product
d. marginal resource cost as a percentage of the price of capital
e. marginal revenue product as a percentage of its marginal resource cost
E
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Refer to Figure 3.2. The Nash equilibrium is where
A) Wilma plays North and Betty plays West. B) Wilma plays North and Betty plays East. C) Wilma plays South and Betty plays East. D) There is no Nash equilibrium in this game.
Suppose that X and Y are substitute goods. If the price of good X increases, we can expect
a. the demand for good X to shift to the left b. an upward movement along the demand curve for good Y c. the demand curve for good Y to shift to the right d. a downward movement along the demand curve for good Y e. the demand curve for good Y to shift to the left
At a price of $10, the marginal revenue of a monopolist is $6. If the marginal cost of production is $8, what should the monopolist do in order to maximize profits?
A. Increase its price. B. Decrease its price. C. Keep its price at the same level. D. There is not enough information to solve.
Refer to Scenario 19.1 below to answer the question(s) that follow. SCENARIO 19.1: An individual earning $60,000 pays $12,000 in taxes. The marginal tax rate on any income earned above $60,000 is 25%. Refer to Scenario 19.1. When this person earns $70,000, her tax payment would be
A. $2,500. B. $14,500. C. $17,500. D. indeterminate from this information.