If the marginal physical product of more labor is twice as high as the marginal physical product of more machinery, a rational firm should
A. reduce the labor used and increase the machinery used if labor costs half as much as machinery.
B. reduce the labor used and increase the machinery used if labor and machinery cost the same amount.
C. reduce the labor used and increase the machinery used only if labor costs more than twice as much as machinery.
D. reduce the labor used and increase the machinery used only if labor costs exactly twice as much as machinery.
Answer: C
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Joe is the owner of the 7-11 Mini Mart, Sam is the owner of the SuperAmerica Mini Mart, and together they are the only two gas stations in town. Currently, they both charge $3 per gallon, and each earns a profit of $1,000. If Joe cuts his price to $2.90 and Sam continues to charge $3, then Joe's profit will be $1,350, and Sam's profit will be $500. Similarly, if Sam cuts his price to $2.90 and Joe continues to charge $3, then Sam's profit will be $1,350, and Joe's profit will be $500. If Sam and Joe both cut their price to $2.90, then they will each earn a profit of $900. You may find it easier to answer the following questions if you fill in the payoff matrix below. 
width="383" />The clear outcome of this game is that: A. neither Joe nor Sam will cut his price. B. Joe will cut his price and Sam won't. C. both Joe and Sam will cut their price. D. Sam will cut his price and Joe won't.
When interest rates in the U.S. increase, we can expect NCO to:
A. decrease, because capital inflow is increasing. B. increase, because capital inflow is increasing. C. decrease, because capital outflow is increasing. D. increase, because capital outflow is increasing.
Suppose the price of a quart of milk rises from $1.00 to $1.20 and the price of a T-shirt rises from $8.00 to $9.60 . If the CPI rises from 150 to 195, then people likely will buy
a. more milk and more T-shirts. b. more milk and fewer T-shirts. c. less milk and more T-shirts. d. less milk and fewer T-shirts.
Which of the following groups were losers after the European Union's imposition of an antidumping duty on shoes imported from China?
a. European consumers and European shoe manufacturers b. Chinese consumers and Chinese shoe manufacturers c. Chinese consumers and European shoe manufacturers d. European consumers and Chinese shoe manufacturers