Which of the following is not considered a barrier to entry?
a. economies of scale
b. patents
c. control of a scarce resource
d. licensing
e. perfect price discrimination
E
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Depreciation allowance ________ the taxes a firm must pay and ________ the net present value of an investment.
A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases
The labor supply curve reflects how
a. workers' decisions about the labor-leisure tradeoff respond to a change in the wage. b. workers' decisions about the opportunity cost of labor respond to a change in the quantity of labor supplied. c. firms' decisions about the labor-leisure tradeoff respond to the quantity of labor demanded. d. firms' decisions about how the quantity of labor they hire respond to changes in their opportunities to earn profits.
Which of the scenarios best reflects the meaning of the term inflation targeting?
A) A local shopping mall offers an "inflation discount," which compensates for the recent increase in prices, in the hopes of targeting savvy consumers. B) Hoping to reduce inflation to improve public opinion, the Federal Reserve decides to lower interest rates. C) A central bank is expected to achieve a 3% annual inflation rate. D) In anticipation of the upcoming election, the chairman of the Federal Reserve lowers interest rates, hoping to win support for the incumbent president.
If a competitive firm's marginal profit is positive at an output of 1000 units,
A) at 1000 units, MR = MC. B) it should produce more than 1000 units. C) it should produce less than 1000 units. D) at 1000 units, MR < MC.