An increase in the price of a product
A) automatically increases wages.
B) raises the firm's demand for labor.
C) would probably decrease total revenues.
D) increases productivity.
Answer: B
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Consider the following simplified sequence of exchanges. A farmer sells wheat to a miller, for 25 cents. The miller grinds the wheat into flour, and sells that to a baker, for 35 cents
The baker turns the flour into a loaf of bread, which she sells to a grocer for 60 cents. The grocer then sells you the loaf of bread for 85 cents. What can we conclude? A) Your purchase of the bread avoided the use of a middleman. B) The grocer's profit means you lost on the deal. C) GDP increases by 25 cents. D) GDP increases by 85 cents. E) GDP increases by $2.05.
Textbook publishers hope to maximize profits. Authors, however, face very different incentives. Authors are typically paid royalties, which are a specified percentage of total revenue from the sale of a book
And so, for example, if an author's contract says that she will receive 20 percent of the revenues from the sale of a text and the publisher's total revenues are $100,000, the author's royalties will be $20,000 . Who will prefer a higher price for the text, the publisher or the author?
All of the following are automatic stabilizers EXCEPT
A) the federal income tax system. B) welfare payments. C) discretionary tax cuts. D) unemployment compensation.
Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:
a. cash bonuses based on length of service with the firm b. bonuses for resisting hostile takeovers c. requiring officers to own stock in the company d. large corporate staffs e. a, b, and c only