Suppose a multi-product monopolist sells two complementary goods, A and B. Annual market demand for good A is QdA = 600 - 25PA - 12PB. Each time a consumer buys A, his demand for B is QdB = 4 - 0.4PB. The marginal cost of good A is a constant $4, and the marginal cost of good B is a constant $0.50. Suppose the price of good B is $5. If the monopolist considers the effect of additional sales of A on the sales of good B, what will be its total profit from the sales of A and B?
A. $7,414.75
B. $5,752.25
C. $4,422.25
D. $1,429.75
C. $4,422.25
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Say's Law is consistent with the _______ view of the economy.
A. Classical B. Keynesian C. Monetarist D. Supply-side
Temporary layoffs are common in the United States, especially among workers who are heavily invested with specific training. Why?
A. Workers without specific training are never hired in the first place. B. Specific training deteriorates quickly, so a laid-off worker with specific training is not valuable to any firm. C. The laid-off worker with specific training is more valuable to the firm that laid her off than she is to any other firm. Thus, it is in the worker's best interest to remain unemployed until recalled to work at her original firm. D. Unemployment benefits are tied to specific training. E. Workers with specific training know they do not need to work hard when employed.
Since the demand for labor depends upon the demand for the final product, we say that labor is
A) a derived demand. B) an "inverse" demand. C) a positive demand. D) a reverse demand.
In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is an inferior good
a. The population increases and productivity increases. b. Income increases and the price of inputs decrease. c. The number of firms in the market decreases and income increases. d. Consumer preference increases and the price of a complement decreases. e. The price of a substitute in consumption decreases and the price of a substitute in production decreases.