Which of the following can be a signal of product quality to customers?
a. Discounts offered on bulk purchases of the product.
b. Gift of complementary products offered to purchasers.
c. The information provided by the salesperson about the product.
d. A warranty provided along with the product.
D
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In the short run, when the prevailing market price falls below the average variable cost curve, a firm in perfect competition will shut down because: a. economic profit is zero
b. price is less than marginal revenue. c. marginal revenue is insufficient to pay average variable cost. d. other firms will enter the market seeking profits.
Refer to Figure 7.3. Suppose a firm moves along the isoquant from point a to point b. The rate of substitution for labor with capital is:
A. 2.
B. -2.
C. ½.
D. -½.
The marginal rate of substitution between goods A and B measures the price of A relative to the price of B
a. True b. False Indicate whether the statement is true or false
The quantity of reserves demanded decreases as the federal funds rate rises because
A. people want more liquid assets as the federal funds rate rises. B. the price of bonds rise as the federal funds rate rises. C. the opportunity cost of holding excess reserves increases as the federal funds rate rises. D. people want more money to invest as the federal funds rate rises.