When a firm decides to hire more workers because local wage rates have decreased, this is an example of
a. substitution in consumption.
b. market failure.
c. labor exploitation.
d. substitution in production.
Ans: d. substitution in production.
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If aggregate output is below its equilibrium level ________
A) there is an excess demand for goods B) actual output is below planned expenditure C) firms will tend to replenish their low inventories driving output up toward equilibrium D) all of the above E) none of the above
Despite the fact that the Quick-Buzz Coffee Company provides a coupon in the local newspaper that can be redeemed for $1 off the price of its best-selling coffee beans, not all buyers actually use the coupon. Assuming everyone has a subscription to the newspaper, from this we know that:
A. the coffee drinkers who use the coupons have more elastic demand than the coffee drinkers who pay full price. B. the coffee drinkers who use the coupons have less elastic demand than the coffee drinkers who pay full price. C. all coffee drinkers have a highly inelastic demand. D. all coffee drinkers have a highly elastic demand.
Concentration ratios measure the:
A. geographic location of the largest corporations in each industry. B. degree to which product price exceeds marginal cost in various industries. C. percentage of total industry sales accounted for by the largest firms in the industry. D. number of firms in an industry.
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country A would be using resources efficiently if it produced:
A. (500 iPods, 150 tablets). B. (500 iPods, 250 tablets). C. (500 iPods, 200 tablets). D. (500 iPods, 100 tablets).