Which of the following is an example of a short-run decision?
A. A business consulting firm considering whether to open a new office in another city where many of its clients are based.
B. An automobile manufacturing company considering whether to expand its existing workforce.
C. A business consulting firm considering whether to hire new consultants, move to a larger space, and purchase additional equipment.
D. An automobile manufacturing company considering whether to invest in robotic equipment to develop a more cost-effective production technique.
Answer: B
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The cost-output elasticity can be written and calculated as
A) MC/AC. B) AC/MC. C) (AC)(MC). D) (AC)2(MC). E) (AC)(MC)2.
Suppose that a tax is placed on a particular good. If the sellers end up bearing most of the tax burden, this indicates that the
a. demand is more inelastic than supply. b. supply is more inelastic than demand. c. government has required that buyers remit the tax payments. d. government has required that sellers remit the tax payments.
Under what conditions is it likely that the labor supply curve may become backward bending? What roles do the income and substitution effects play?
What will be an ideal response?
When considering the aggregate demand curve, the wealth effect, interest rate effect and international trade effect reinforce each other.
Answer the following statement true (T) or false (F)