A firm is spending the profit-maximizing amount on product development when
A) people perceive the firm's product to be better than those of its competitors.
B) the marginal cost of product development is equal to the marginal revenue from product development.
C) the price of the good is higher than its marginal cost.
D) the advertising costs are covered.
E) the firm's total revenue exceeds its total costs.
B
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A person committing to carpool with a friend to the gym for daily workouts is an example of:
A. status quo bias. B. the endowment effect. C. a commitment device. D. positive framing.
Answer the following statements true (T) or false (F)
1. A decrease in the prices of computer chips for PCs will increase the supply of PCs. 2. The development of a new production technique that lowers the cost of producing 3-D movies will shift the supply curve of 3-D movies to the right. 3. A surplus indicates that the quantity demanded is greater than the quantity supplied at that price. 4. If we observe the price of a good in a competitive market rising, then we can conclude that there had been a shortage in the market.
Which of the following is evidence of a shortage of walnuts?
A) Firms lower the price of walnuts. B) The price of cashews is lowered in order to make up for the walnut shortage. C) The equilibrium price of walnuts falls due to a decrease in demand. D) The quantity of walnuts demanded is greater than the quantity supplied.
Employers choose to offer efficiency wages because:
A. it has proven to make workers more productive. B. they give employees an incentive to work hard to keep their jobs. C. it will reduce turnover, saving the employer time and money to hire and train new workers. D. All of these are true.