The Lend Me Your Ears Company monopolizes the production of a specialized hearing aid. The Lend Me Your Ears Company will find it profitable to increase the production of the hearing aids as long as marginal revenue is
A. equal to marginal cost.
B. less than marginal cost.
C. greater than marginal cost.
D. positive.
Answer: C
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An example of a unilateral transfer is
A) a gift to a relative who lives abroad. B) a check received in payment for an import. C) gold payments to foreign companies. D) SDR payments to world creditors.
Julie works at a local hat factory for $12 an hour and typically works 40 hours a week. The company threatens layoffs, so Julie and the others agree to a pay cut. Julie now earns $10 an hour and works every hour over 40 that her boss will let her. Julie's response to this pay cut was to work:
A. more, demonstrating a dominant income effect. B. more, demonstrating a dominant price effect. C. less, demonstrating a dominant income effect. D. less, demonstrating a dominant price effect.
One disadvantage of using a tournament is that
A. tournaments are not able to identify the most productive workers. B. workers who view themselves as losing the tournament will quit providing effort. C. the winners of tournaments are typically overpaid. D. tournaments are more expensive than time rates or piece rates. E. no one will apply for tournament-style jobs.
When disposable income is zero, the level of induced consumption is
A. negative. B. zero. C. positive. D. indeterminate.