An option may add value to a transaction because:
a. interest charges are reduced.
b. the price of the good is reduced.
c. additional information may become available.
d. options provide buyers with monopsony power.
c
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If Joe receives an increase in his wage rate and decides to decrease his hours worked, the
A) substitution effect and the income effect must be equal. B) substitution effect must exceed the income effect. C) income effect must exceed the substitution effect. D) substitution effect must be zero.
Given the values in the table above, consumption is ________ when equilibrium output is 15
A) 12.3 B) 11.86 C) 12.05 D) 11.55 E) none of the above
The shape of an experience curve suggests that
A) specialization does not matter. B) learning does not pay. C) experience can lower costs. D) none of these choices.
The decision by firms of the quantity of output to supply is based on
A. government oversight. B. the price of inputs. C. the price of output. D. techniques of production available.