Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is TRUE?
A) The production function has decreasing returns to scale.
B) The production function has increasing returns to scale.
C) The production function has constant returns to scale.
D) Returns to scale vary with the level of output.
A
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Refer to the figure below. 
If Row Resorts keeps its rates high, then Column Cruises would receive the highest payoff if it:
A. agreed with Row Resorts to reduce their rates at exactly the same time. B. chose either strategy because it will have the same payoff in either case. C. offered reduced rates. D. kept its rates high.
What is the shape of a perfectly elastic demand curve? Explain its significance for a seller.
What will be an ideal response?
The supply curve of labor is upward sloping because the marginal revenue produced by labor is greater than one
Indicate whether the statement is true or false
A car sells at different prices at different dealerships in an oligopolistic market. If a consumer has imperfect information about the price of a car at each dealership, he should
a. always gather all available information about prices. b. gather information about prices until the expected marginal utility of more information equals the marginal cost of gathering it. c. gather information about prices only if it can be gathered without cost. d. ignore information about prices because it is irrelevant to making an "optimally imperfect" decision.