A firm will demand more units of a resource if:
a. the resource adds more to revenues than it costs.
b. the firm experiences diseconomies of scale.
c. the price of the good that uses the resource declines.
d. the resource has many substitutes.
e. the resource has few substitutes.
a
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Individuals cannot buy unemployment insurance for themselves. The most likely reason for this is
A. moral hazard. B. imperfect information. C. a culture of poverty. D. the free-rider problem.
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table. ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50Which project yields the greatest return, regardless of whether a boom or a recession occurs?
A. A B. B C. C D. D
Figure 6.3 shows the cost structure of a firm in a perfectly competitive market. If the market price is $6, then the firm will:
A. be better off producing 150 units than shutting down. B. be better off exiting the market and using the resources for other production activities. C. be better off shutting down in the short run and waiting until the market price rises above $10. D. None of these
Answer the following questions true (T) or false (F)
1. The U.S. is highly sensitive to increasing interest rates. 2. The U.S. farm sector is characterized by a large number of large, highly capitalized farming operations. 3. A major change in farm program policy forthcoming in the 2014 farm bill involves greater reliance on property insurance as a means of providing a safety net to farmers.