A grower faces a price of $0.13/pound for his/her pumpkins. The buyers of the pumpkins will buy as many pumpkins as offered by the grower at this price. The pumpkin farmer evaluates his/her costs and finds that his/her production costs (average total costs) are $0.16 per pound. He/she also evaluates the marginal cost of production and finds that the marginal cost of production at the current level of production is $0.14 per pound. The average variable cost of production at the current level is $0.12 per pound. In the short run, the producer should try to:
a. Increase amount produced to get maximum profit
b. Decrease the amount produced to get maximum profit
c. Leave unchanged the amount produced to get maximum profit
d. Stop producing and let the pumpkins rot
b. Decrease the amount produced to get maximum profit
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Consider the following three bonds, Bond F, Bond J and Bond P. Bonds F and P mature in 1 year while Bond J matures in 2 years. Bond F and J have a face value of $10,000 while Bond P has a face value of $12,000 . If the interest rate is 15%, rank the three bonds from highest present value to lowest present value
a. Bond F, Bond P, Bond J b. Bond P, Bond F, Bond J c. Bond J, Bond F, Bond P d. Bond P, Bond J, Bond F e. Bond F, Bond J, Bond P
According to the economic theory of labor markets, new lawyers are eager to fill clerkships for judges, even at a miniscule wage, because:
a. the clerkship enhances future earnings possibilities. b. the total utility of nonmarket work and leisure is lower in case of clerkship. c. the income effect is smaller than the substitution effect for the higher-paying job. d. the income effect is equal to the substitution effect for the higher-paying job.
In competitive markets, the marginal revenue product curve and marginal physical product curve have similar shapes because
A. The law of diminishing marginal utility and the law of diminishing returns imply a downward-sloping demand curve in the product market. B. The demand curve for labor is the same for both the individual firm and the market as a whole. C. The demand curve for the product slopes downward in accordance with the law of diminishing returns. D. MRP = P × MPP.
In terms of framing, we respond better to:
A. positive framing. B. consistent framing. C. neither; research has shown that framing ultimately doesn't matter. D. negative framing.