Even stable and predictable inflation can cause which of the following?
a. shoe leather
b. menu cost
c. tax distortions
d. All of the above
Answer: d. All of the above
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The commodity substitution bias is that consumers substitute high-quality goods for low-quality goods
Indicate whether the statement is true or false
____________ is the process of making a choice between two or more alternatives
a. Bargaining b. Trading c. Decision making d. Goal setting
All of the following can cause conflict between divisions EXCEPT
a. Divisional managers are rewarded on the profitability of the firm, instead of profitability of the division b. managers of profit centers care too little about the effects of their decisions on other divisions c. managers are rewarded only for how much profit their division generates d. corporate executives cannot tell when one divisional manager's decisions are appropriate or not
When carmakers began to cut costs of producing cars by designing the chassis, engines, and transmissions so that different models could be produced on the same assembly line, production costs fell $240 per car. This change caused car makers' short-run average cost curves to:
A. remain unchanged, though there was a movement along the short-run average cost curve. B. shift down. C. remain unchanged; only the long-run average cost curve was affected. D. shift up.