The formula for optimal employment of two resources, x and y, is
a. MPx - MPy
b. MRPx = MRPy
c. MPx ? Px = MPy ? Py
d. MRCx = MRCy
e. MRPx/MRCx = MRPy/MRCy = 1
E
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Opportunistic behavior may occur when
A) a firm buys its inputs from multiple suppliers. B) firms incur significant transaction costs when negotiating contracts. C) a firm backwards vertically integrates. D) a firm can buy a key component from only one supplier.
When calculating the TSLS standard errors
A) you do not have to worry about heteroskedasticity, since it was eliminated in the first stage B) you can use the standard errors reported by OLS estimation of the second stage regression. C) the critical values from the standard normal table should be adjusted for the proper degrees of freedom. D) you should use heteroskedasticity-robust standard errors.
In the very short-run period,
a. the price elasticity of supply is very elastic. b. the price elasticity of demand is very elastic. c. the cross elasticity of demand is very inelastic. d. income elasticity is very elastic. e. the price elasticity of supply is very inelastic.
Consider an auctioneer who is selling an item through an auction. It is known that the 25 risk-neutral bidders have affiliated values that are distributed between $0 and $500 million. Based on this information, the auction type that will maximize expected revenue is:
A. first-price, sealed-bid auction and Dutch auction. B. English auction. C. second-price, sealed-bid auction. D. English auction and second-price, seal-bid auction.