In August 1988, the Los Angeles Kings hired Wayne Gretzky for $15 million in cash. The hockey team’s decision must have been based on the expectation that
A. Gretzky’s opportunity cost will exceed $15 million.
B. Gretzky’s marginal revenue product will equal or exceed $15 million.
C. the team’s total revenue will equal $15 million.
D. Gretzky’s marginal revenue product will rise in the long run.
Answer: B
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Refer to Table 23-4. Given the consumption schedule in the table above, the marginal propensity to save is
A) 0.3. B) 0.4. C) 0.5. D) 0.6.
In an increasing cost industry, the long-run supply curve is
a. positively sloped. b. negatively sloped. c. horizontal. d. vertical.
Unlike a perfectly competitive firm, a monopolistically competitive firm
a. faces a perfectly inelastic demand curve. b. can earn positive economic profit in the short run and in the long run. c. cannot earn positive economic profit even in the short run. d. does not have the same marginal revenue at every output level.
The goal of stabilization policy is to stabilize aggregate _____. As a result, stabilization policy will also stabilize _____ and _____
Fill in the blank(s) with correct word