A profit-maximizing firm should not undertake an R&D project for which the:
A. expected rate of return exceeds its interest-rate cost of funds.
B. interest-rate cost of funds exceeds the expected rate of return.
C. expected returns are in the distant future.
D. the expected returns, though potentially very large, are uncertain.
Answer: B
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Which of the following is likely to lead to a left shift in the demand curve for labor in the printing ink manufacturing industry?
A) A decrease in the price of printers B) An increase in the demand for printers C) An increase in the price of printing ink D) A decrease in the demand for printing paper
Some of the cost curves for Ike's Ice Cream Kitchen are given in the above figure. At which of the following levels of output does the marginal product of labor equal the average product of labor?
A) at 0 gallons B) at 10 gallons C) at 40 gallons D) at 60 gallons
If goods X and Y are such that the cross price elasticity between them is negative, and if the income elasticity of X is negative, then these goods are:
a. inferior complements. b. luxury complements. c. income elastic substitutes. d. normal substitutes. e. income elastic complements.
When employment discrimination results from the personal prejudices of employers, economic theory suggests that
a. discrimination by an employer will reduce production costs since the employer can pay lower wages. b. the wages of employees who are discriminated against will rise. c. an employer who discriminates will have the same costs as those who do not discriminate. d. competitive forces will tend to reduce discrimination.