Corn is used to produce tortillas. If the price of corn increases:
A. the demand for tortillas increases.
B. the demand for tortillas decreases.
C. the supply of tortillas increases.
D. the supply of tortillas decreases.
Answer: D
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Toot Sweets Bakery sells freshly baked muffins from 6.30 am at $1.20 per muffin. By 4 pm, the remaining muffins are marked down to $0.60 each. Which of the following statements is true?
A) Toot Sweets is trying to minimize its loss. B) Toot Sweets engages in price discrimination; a higher price for those who cannot wait and a lower price for those willing to wait until 4 pm. C) Toot Sweets has underestimated the demand for its muffins. D) Toot Sweets is trying to prevent the opportunity to make arbitrage profit.
Refer to Table 17-5. Oil Can Harry's, a new automobile service shop, is ready to start hiring. The table above shows the relationship between the number of mechanics the firm hires and the quantity of oil changes it produces
a. Suppose the price of an oil change is $20. Complete the table by filling in the values for marginal product and marginal revenue product. b. Oil Can Harry's is an input price-taker. Suppose the wage paid to mechanics is $80 per day. What is the profit-maximizing number of mechanics? c. Suppose the wage rate rises to $100 per day. (i) What happens to the firm's demand curve for mechanics? (ii) What happens to the profit-maximizing quantity of mechanics? d. Suppose the wage rate is $60 per day and the price of an oil change is now $15. (i) What happens to the firm's demand curve for mechanics? (ii) What happens to the profit-maximizing quantity of mechanics?
The original Federal Reserve Act
A) specified open market operations as the Fed's main policy tool. B) specified open market operations as one of several Fed policy tools. C) specified that open market operations be employed by the Fed only in circumstances where discount loans were ineffective. D) did not specifically mention open market operations.
If both players in a game have dominant strategies, we say that the game has:
A) a constant sum. B) a nonconstant sum. C) independence of irrelevant alternatives. D) an equilibrium in dominant strategies.