A low concentration ratio would most likely indicate that the industry resembles the behavior of a(n)
A. cartel.
B. monopolistic competitor.
C. monopoly.
D. oligopoly.
B. monopolistic competitor.
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Assume that a firm pays its workers above the market-clearing wage in a competitive industry. Explain how this might be a strategy to mitigate the problem of moral hazard?
What will be an ideal response?
In Table 13-1, if the required reserve ratio is 10 percent, what will happen to the money supply? Use the oversimplified money multiplier in your calculations
a. The money supply will decrease by $100 million. b. The money supply will decrease by $10 million. c. The money supply will not change. d. The money supply will increase by $10 million. e. The money supply will increase by $100 million.
A firm with two factories, one in Michigan and one in Texas, has decided that it should produce a total of 500 units of output in order to maximize profit. The firm is currently producing 200 units in the Michigan factory and 300 units in the Texas factory. At this allocation between plants, the last unit of output produced in Michigan added $5 to total cost, while the last unit of output produced in Texas added $3 to total cost. The firm
A. should produce 250 units in each factory. B. should produce more in the Michigan factory and less in the Texas factory. C. should produce more in the Texas factory and less in the Michigan factory. D. is maximizing profit; should keep producing 200 units in Michigan and 300 units in Texas.
In the context of labor markets, shirking refers to:
A. the nonmonetary disadvantages of certain jobs. B. the neglecting or evading of work. C. the elimination of monitoring costs. D. any scheme where pay is directly related to worker output.