Which of the following is a typical example of a fixed cost of production in a business firm?
A. Depreciation of capital
B. Wages paid to hourly workers
C. Electricity charges
D. Sales taxes due
A. Depreciation of capital
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Crucial assertions in the menu-cost literature are that those costs ________ be large for them to have an effect on firms' pricing, while potential total welfare losses ________ menu costs that have been avoided
A) need not, may be several times larger than B) need not, are generally much less than C) must, may be several times larger than D) must, are generally much less than
How is a firm's vertical scope determined?
In equilibrium, all traded goods sell at the same price internationally because of
a) government intervention B) arbitrage C) the fact that the underlying value is the same everywhere D) none of the above
Restrictive covenants
A) generally require that firms use debt finance rather than equity finance. B) generally require that firms use equity finance rather than debt finance. C) put restrictions on the use of borrowed funds. D) were outlawed under the Civil Rights Act of 1964.