Diversification makes sense as a business strategy if it
A) creates job security for workers.
B) creates value for stockholders.
C) creates accounting profits.
D) creates greater market share.
B
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Long-run economic rent or profit do not exist for fixed factors like land because
A) bidding drives up the price of the factor until no economic rent exists. B) there is no market for such factors. C) these factors have L-shaped isoquants. D) these factors will earn economic profits.
When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is appropriate to ignore that the market price includes a margin above marginal cost b. Consider whether the product on the market includes costly features your downstream division does not use c. It is OK if the product on the market is inexpensive because its quality is lower than you use d. If it is similar enough, it is justification for you producing it in-house
One important unintended consequence of the Smoot-Hawley Tariff Act was to:
a. lessen the severity of the Great Depression by increasing exports. b. provide the federal government with an effective tool for exercising monetary policy. c. increase the efficiency of domestic automobile production. d. increase the severity of the Great Depression by causing other countries to retaliate, and thus leading to a decline in exports. e. increase the U.S. government budget deficit by $15 million.
This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.According to the figure shown:
A. both have incentive to put forth high effort. B. both will act in their own self-interest and get a stable, but less than optimum, equilibrium. C. there is no stable equilibrium to the game. D. both will act in their own self-interest and get an optimum equilibrium that is stable.