The fast-food industry, from Back Yard Burgers to KFC, promises good food delivered quickly. The value of the consumer's time
A. must be discounted to make sure it is negative.
B. is a key component in creating value for the firm and the consumer.
C. is usually so low that fast food is unimportant in the marketplace.
D. is less important than production costs.
Answer: B
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Given a fixed upsloping AS curve, a rightward shift of the AD curve will ________.
A. increase both the price level and real output B. cause cost-push inflation C. increase the price level but not real output D. increase real output but not the price level
Given the market for illegal drugs, when the government is successful in reducing the flow of drugs into the United States,
a. supply decreases, demand is unaffected, and price increases. b. demand decreases, supply is unaffected, and price decreases. c. demand and supply both decrease, leaving price essentially unchanged. d. supply decreases, demand increases, and price increases substantially.
Which of the following statements is not correct?
a. In the long run, there are no fixed costs. b. Marginal cost is independent of fixed costs. c. Economies of scale is a short-run concept. d. Diminishing marginal product explains increasing marginal cost.
Peter was recently hired as a salesman for a national consulting firm. His job involves spending a significant portion of his time out of the office visiting prospects and attending conferences. Which of the following is a strategy the consulting firm may employ to discourage Peter from shirking his responsibilities?
a. Tell Peter that the shareholders want to earn a large profit this year. b. Pay Peter commissions on what he sells after the work has been completed. c. Allow Peter to set his own schedule and work from home frequently. d. Pay Peter a lower wage than he would earn in a similar job at another firm.