Stan owns a software design business. He does not have time to expand his office space or redesign the layout of his office. He can increase the amount of work he does by working more hours, asking his current employees to work more hours, or hiring more
employees. The relationship between Stan's inputs and the maximum output his firm can produce is called his
A) long-run production function.
B) production possibilities frontier.
C) short-run production function.
D) cost function.
Answer: C
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The management of Local Cinema has estimated the monthly demand for tickets to be ln Q = 22,328 ? 0.41 ln P + 0.5 ln M ? 0.33 ln A + 100 ln PDVD, where Q = quantity of tickets demanded, P = price per ticket, M = income, A = advertising outlay, and PDVD = price of a DVD rental. It is known that P = $5.50, M = $9,000, A = $900, and Pvcr = $3.00. Based on the information given, which of the following statements is false?
A. Movies are normal goods. B. The advertising elasticity of demand for movie tickets is ?0.33. C. Advertising decreases the demand for movie tickets. D. Movies are complements for DVD rentals.
In a competitive economy, workers will be paid according to their
A. marginal productivity. B. status. C. need. D. age.
Strawberries, a normal good, are produced in a perfectly competitive market. Average consumer incomes increase. This will cause the individual strawberry farmer?s marginal revenue to ________ and their profit-maximizing level of output to ________.
A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease
Charging different prices to different buyers for different products is called price discrimination.
Answer the following statement true (T) or false (F)