New firms have incentive to enter an industry when there is(are):
A. an abundance of labor.
B. positive economic profits.
C. new production technologies.
D. high capital costs.
Answer: B
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Refer to the scenario above. Which of the following combinations lie below Jack's production possibilities curve?
A) 10 paintings and 6 sculptures B) 5 paintings and 1 sculpture C) 10 paintings only D) 10 sculptures only
Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. She has an effort cost of C = e2 and a reservation wage of $1,500 so that her compensation package is W = 1,500 + 0.2 Q, where the CEO sets the incentive at 0.2 and Q = 200 e. Here effort is known only by the employee. There is a random shock to output each period whose mean is zero. (a) What is the optimal effort for Mary Sue Nelson? (b) On average, what total wage or salary will she earn each month? (c) On average, what is the output of sales contracts that she makes? (d) On average, what kind of profit will the CEO earn off of Nelson's work?
What will be an ideal response?
If we assume that government expenditure, investment, and net exports are not affected by income, the slope of the consumption function equals
A. The change in income divided by the change in consumption. B. APC. C. APS. D. The slope of the aggregate expenditure curve.
Which one of the following is a function of the Federal Reserve System?
A. providing a system for check clearing B. serving as a lender of last resort C. providing the economy with currency D. all of these