When L.L. Bean decides to increase its prices due to general inflation, they must reprint the millions of catalogs they produce and distribute. The costs associated with doing so in response to inflation are called:
A. shoe-leather costs.
B. menu costs.
C. printing costs.
D. tax distortions.
Answer: B
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Incremental costs
a. are the total costs of abatement and regulation linked to environmental policy b. include only explicit costs c. refer to the change in costs associated with an environmental policy initiative d. include only implicit costs
Imperfect competition results in inefficiency but greater equity than pure competition.
Answer the following statement true (T) or false (F)
Suppose that an increase in the price level of one country drives up prices in other countries. This, in turn, increases the price level in the first country. This process is the
A. price feedback effect. B. balance of trade effect. C. J-curve effect. D. trade feedback effect.
A perfectly competitive firm will hire labor as long as the marginal revenue product of labor is
A. zero. B. less than the going wage. C. greater than the going wage. D. equal to the going wage.