By vertically integrating, two firms can
A) increase market share.
B) avoid holdup problems.
C) limit the problems inherent in moving too quickly.
D) avoid antitrust issues.
B
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In the above figure, what is the marginal cost of the 4th pizza?
A) $0 B) $4 C) $9 D) $36 E) 4 pizzas
Two university graduates, Bill and Steve, worked for an advertising agency at an annual salary of $40,000 each for 3 years after they graduated. Then, they decided to quit their jobs and start a partnership that designs and builds Web sites
They rented an office for $12,000 a year and bought capital for $30,000. To pay for the equipment, Bill and Steve borrowed money from a bank at an annual interest rate of 6 percent. During their first year of operation, the partners' total revenue was $100,000. The market value of their capital at the end of the year was $20,000. If Bill and Steve do not design Web pages, their best alternatives are to return to their previous job. a) What is the firm's economic depreciation? b) What are the partnership's costs? c) What is the firm's economic profit in the first year of operation?
MC and MU are set equal to one another in a market economy because
a. producers and consumers are free to communicate with one another. b. producers and consumers both respond to the same price. c. consumers must accept the prices set by producers. d. producers must accept the price set by consumers.
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher