The marginal revenue product of labor curve will always shift to the left if
A. the price of capital falls.
B. product demand decreases and product price decreases.
C. the wage rate falls.
D. product demand increases and product price increases.
Answer: B
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Sulfur dioxide emissions allowances are available for purchase on the Chicago Mercantile Exchange, and several environmental groups have raised money to purchase these certificates, which they subsequently destroy
What would be the impact of these environmental groups purchasing and then destroying these cap-and-trade certificates on the price of these certificates in the market? A) The price rises. B) The price falls to zero. C) The price falls, but not to zero. D) The price remains unchanged because the certificates are destroyed.
Unless you accept his 'final offer' your negotiation opponent threatens to scrap the whole deal:
a. His threat is more believable if both parties would be harmed by scrapping the deal b. His threat is more believable if he has invested resources that lower his return to other options c. His threat is more believable if he puts his threat 'in writing' d. His threat is more believable if he has balked at this course of action in the past
Suppose wheat farmers are price takers. If wheat farmers are currently making economic profits, over time we would expect that
a. existing wheat farmers would plant more acres of wheat. b. farmers growing other crops would switch some of their land from these crops to the growing of wheat. c. the wheat farmers will continue to earn economic profits because they would be driven out of business without such profit. d. both a and b are correct.
Which of the following statements is true?
A. Adverse selection is a problem of monopoly and moral hazard is a problem of information asymmetry. B. Adverse selection and moral hazard are problems stemming from asymmetric information. C. Moral hazard is a problem that occurs before a transaction. D. Adverse selection is a problem that occurs after a transaction.