In the short run, a profit maximizing firm will respond to a reduction in the wage rate by
A. decreasing output.
B. hiring less labor.
C. hiring more capital.
D. hiring more labor.
Answer: D
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The economists of the Federal Trade Commission suggested rejection of Coke's merger with Dr. Pepper as it could:
a. increase overall competition in the soft drinks industry. b. lower Coke's share in the carbonated and soft drinks market. c. reduce the profitability of the entire soft drinks industry. d. allow Coke to profitably raise its prices by 5 to 10 percent.
Externalities arise when: a. the benefits of a transaction between producers and consumers are enjoyed by only the consumers. b. the benefits of a transaction between producers and consumers are enjoyed by only the producers. c. a transaction negatively impacts people who are not directly involved in the transaction
d. a transaction occurs without the government's approval.
Cell phone companies offer pricing plan alternatives in order to convert some
a. consumer surplus into profit b. producer surplus into profit c. economic profit into normal profit d. profit into consumer surplus e. consumer surplus into deadweight loss
Infrastructure projects result in the most value from a fiscal stimulus but a problem is that
a. there are technological issues that need to be solved. b. they are too complex to implement. c. most such projects are "prestige" projects, with little tangible value. d. most such projects do not increase productivity long into the future. e. most such projects are not "shovel ready" when the stimulus is needed.