Suppose compensation is given by W = 500,000 + 200 ? + 17S, where W = total compensation of the CEO, ? = company profits (in millions) = $300, and S = sales (in millions) = $500. What percentage of the CEO's total earnings is tied to profits of the firm?
A. 1.5 percent
B. 43.4 percent
C. 7.9 percent
D. 10.6 percent
Answer: D
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If a firm in a perfectly competitive industry is experiencing higher than normal returns, in the long-run
a. Some firms will leave the industry and price will rise b. Some firms will enter the industry and price will rise c. Some firms will leave the industry and price will fall d. Some firms will enter the industry and price will fall
President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would
a. have no questions but hundreds of answers. b. have 100 questions and 3,000 answers. c. have 1,000 questions but no answers. d. never produce a winner.
The marginal product of labor is equal to the
a. incremental cost associated with a one unit increase in labor. b. incremental profit associated with a one unit increase in labor. c. increase in labor necessary to generate a one unit increase in output. d. increase in output obtained from a one unit increase in labor.
Marginal utility can be:
A) positive, but not negative B) positive or negative, but not zero. C) positive, negative, or zero. D) decreasing, but not negative.