What criticism does the textbook level against the cost-plus-markup theory of price setting?
A) The theory does not agree with what businessmen say about price setting.
B) The theory does not account for vastly different percentage markups on different products.
C) The theory implies firms will sometimes want to set prices below average cost per unit.
D) The theory ignores sunk costs.
E) All of the above.
B
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Total factor productivity is the ratio of a:
a. firm's marginal revenue to its marginal cost. b. firm's total revenues to its total costs. c. nation's total income to its total output. d. nation's output to its stock of labor and capital. e. nation's savings to its capital stock.
Workers in industrial countries earn much higher wages than workers in developing countries because:
a. the industrial countries are labor rich and capital poor economies. b. the industrial countries lack a steady supply of unskilled laborers. c. the industrial countries produce labor intensive goods. d. the marginal productivity of labor is low in the industrial economies. e. the marginal productivity of labor is high in the industrial economies.
Demand for the Brazilian real is
A) determined by how well the real maintains its value. B) a function of the Brazilian banking system. C) derived from the supply of U.S. dollars. D) derived from the demand for Brazilian goods.
When the price of a good increases, the budget constraint does not change.
Answer the following statement true (T) or false (F)