A firm currently employs four workers in a sandwich shop, and produces sandwiches at a total cost per sandwich (ATC) of $3. The sandwiches sell for $5. If the marginal cost of hiring another worker to produce sandwiches is $5.50 per sandwich, then:
A. it will cost $5.50 to make another sandwich, which can only be sold for $5.
B. the firm will lose $0.50 per sandwich if it hires another worker.
C. the firm should not hire a fifth worker.
D. All of these are true.
D. All of these are true.
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Disease, poor nutrition, and substandard health care in developing nations can reduce growth in an economy by
A) reducing physical capital. B) reducing human capital. C) increasing technological change. D) increasing labor productivity.
Classical economists believe that in the short run
A) money neutrality exists and prices adjust rapidly. B) money neutrality does not exist and prices adjust rapidly. C) money neutrality exists and prices do not adjust rapidly. D) money neutrality does not exist and prices do not adjust rapidly.
When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is appropriate to ignore that the market price includes a margin above marginal cost b. It is OK if the product on the market includes costly features your downstream division does not use c. it is OK if the product on the market is inexpensive because its quality is lower than you use d. if it is similar enough, it calls into question whether there are gains from producing it in-house
An economy recovering from a recession moves
A. down from its peak to a period of expansion. B. down from its trough to a period of depression. C. up from its trough to a period of expansion. D. up from its peak to a period of expansion.