Suppose there are four industries. Labor costs are 70 percent of total costs in industry A, 80 percent in B, 45 percent in C, and 10 percent in D. In which of these industries will a 10 percent increase in the price of labor reduce quantity demanded of
labor by the largest proportion?
A) A
B) B
C) C
D) D
Answer: B
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A good that is neither rival nor exclusive is called
a. a private good b. a public good c. a quasi-private good d. an external good e. an open access good
Which of the following best describes the difference between cost-of-service regulation and rate-of-return regulation?
A) Costs determine prices in cost-of-service regulation and prices determine costs in rate-of-return regulation. B) Costs determine prices in cost-of-service regulation and prices are set in rate-of-return regulation so the firm can make a normal rate of return. C) Variable costs determine prices in cost-of-service regulation and prices are set in rate-of-return regulation so the firm can make an economic profit. D) Regulators determine prices in cost-of-service regulation and market forces determine prices in rate-of-return regulation.
The smaller the amount saved out of a change in disposable income, the
A) more horizontal the consumption function. B) larger the MPC. C) more net taxes affect consumption. D) smaller is autonomous consumption. E) smaller the MPC.
The above table gives the total cost schedule for oil changes at the local Jiffy Lube
a. What is Jiffy Lube's total fixed cost? b. What is the total variable cost of 2 oil changes? c. What is the average variable cost of 4 oil changes? d. What is the average fixed cost of 2 oil changes? e. What is the marginal cost of the 3rd oil change?