Ceteris paribus, when market interest rates ________, firms undertake ________ investment projects.
A. increase; more
B. decrease; less
C. increase; fewer
D. decrease; no
Answer: C
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Consider the Cobb-Douglas production function F(L,K) = AL?K?. Which of the following statements is true?
A. Increases in ? increase labor's productivity and raise MRTSLK. B. Decreases in ? increase labor's productivity and raise MRTSLK. C. Increases in ? increase labor's productivity and lower MRTSLK. D. Changes in ? will not affect MRTSLK.
This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts. Both companies are trying to decide whether or not to expand in an area. The area can handle only one of them expanding, and whoever expands will cause the other to lose some business. If they both expand, the market will be saturated, and neither company will do well. The payoffs are the additional profits (or losses) they will earn.If Starbucks and Dunkin Donuts are faced with the game in the figure shown, we can see that:
A. Starbucks has a dominant strategy, but Dunkin Donuts does not. B. Dunkin Donuts has a dominant strategy, but Starbucks does not. C. both companies have a dominant strategy. D. neither company has a dominant strategy.
Which of the following is not a policy implication of the traditional model?
A. There is a potential role for government if there are positive externalities. B. For the most part, the government needs to stay out of people's way and let them trade. C. There is a potential role for government if there are negative externalities. D. The government should take moral and social incentives into account when considering intervention.
Refer to Table 4-3. The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. If the market price of cowboy hats is $50, how many hats will be produced?
A) 0 B) 1 C) 2 D) 4