Which of the following forms of payment is NOT an incentive plan?
A. Bonuses for managers that increase with profits
B. Straight hourly wages for construction workers
C. Commission plans for salespeople
D. Paying waitresses low wages, but allowing them to collect tips
Answer: B
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In 2010, the co-chairmen of President Obama's deficit reduction commission proposed curtailing or eliminating the mortgage interest deduction that millions of homeowner taxpayers receive every year. Economists who favor the proposal would argue that (i) too much of the economy's capital stock is tied up in residential housing. (ii) too little of the economy's capital stock is invested in
corporate capital. (iii) the misallocation of resources results in lower productivity and reduced real wages. a. (i) only b. (ii) only c. (i) and (ii) only d. (i), (ii), and (iii)
Four automobile manufacturers—Jupiter, Apollo, Orion, and Galaxy—dominate their market. Which action poses the greatest threat to the longevity of the oligopoly?
a. Jupiter buys a chain of gasoline stations around the country. b. Apollo lobbies for lower tariffs on imported autos. c. Orion lowers its average total cost by securing a new supplier. d. Galaxy obtains a patent for a new braking system.
As the value of U.S. exports ________, the quantity of ________ demanded increases
A) increases; foreign currencies B) increases; dollars C) decreases; dollars D) None of the above is correct because the value of U.S. exports has nothing to do with the quantity of dollars or foreign currency demanded.
A profit-maximizing firm with market power will always produce a level of output where
A. demand is inelastic. B. price is greater than average total cost. C. marginal revenue is greater than average total cost. D. demand is elastic.