In the short run (specificfactors) model, what will happen to the rental rate on capital and the wage rate when there is FDI in the country?
a. Both the rental rate on capital and the wage rate will increase.
b. Both the rental rate on capital and the wage rate will decrease.
c. The rental rate on capital will increase and the wage rate will decrease.
d. The rental rate on capital will decrease and the wage rate will increase.
Ans: d. The rental rate on capital will decrease and the wage rate will increase.
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A firm can avoid problems with the quality of its products by simply offering a generous warranty
Indicate whether the statement is true or false
If a firm uses only capital and labor as inputs, then what should the firm do at a given rate of production if the marginal physical product of labor per last dollar spent is higher than the marginal physical product of capital per last dollar spent
A) The firm should increase both the quantity of capital and the quantity of labor. B) The firm should decrease both the quantity of capital and the quantity of labor. C) The firm should increase the quantity of capital and reduce the quantity of labor. D) The firm should decrease the quantity of capital and increase the quantity of labor.
Prices are particularly sticky:
A. when there are widespread macroeconomic and monetary disturbances in the economy. B. in the long run. C. when markets are highly competitive. D. when the economy is at full employment and positive demand shocks are occurring.
Refer to the information provided in Figure 15.4 below to answer the question(s) that follow. 
Figure 15.4 Refer to Figure 15.4. Assume The Hand Made Shirt Shop has fixed costs of $75 and is a monopolistically competitive firm. To maximize profits in the short run, this firm should produce ________ personalized sweatshirts.
A. 0 B. 50 C. 70 D. 75