Household production is more likely to occur when
a. it requires many specialized resources
b. technology makes it more costly than market production
c. tax avoidance is undesirable
d. less control over the final product is desirable
e. the opportunity cost of household work is relatively small
E
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Suppose two companies, Macrosoft and Apricot, and considering whether to develop a new product, a touch-screen t-shirt. The payoffs to each of developing a touch-screen t-shirt depend upon the actions of the other, as shown in the payoff matrix below (the payoffs are given in millions of dollars). 
Suppose Apricot makes its decision first, and then Macrosoft makes its decision after seeing Apricot's choice. What will be the equilibrium outcome of this game?
A. Both Apricot and Macrosoft will develop a touch-screen t-shirt. B. Macrosoft will develop a touch-screen t-shirt, and Apricot will not. C. Apricot will develop a touch-screen t-shirt, and Macrosoft will not. D. Neither Apricot nor Macrosoft will develop a touch-screen t-shirt.
Cost minimization suggests that two inputs should be employed to the point where
A) the marginal cost of each input is identical. B) the marginal revenue product of each input is identical. C) the marginal physical product per dollar spent on each input is identical. D) the extra contribution to physical output of the inputs is identical.
A person will choose to work another hour if the benefit of another hour of work is:
A. greater than the opportunity cost. B. exactly equal to the average total cost to the firm. C. exactly equal to the opportunity cost. D. less than the opportunity cost.
One of the main differences between an oligopolistic firm and a monopolistically competitive firm is that a monopolistically competitive firm
A. Is relatively independent; an oligopoly is interdependent. B. Has high barriers to entry; an oligopoly does not. C. Has no market power; an oligopoly has some market power. D. Faces a horizontal demand curve; an oligopoly does not.