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Question
The Acme Oil Company is a vertically integrated firm. It explores for and extracts crude oil. It also refines the crude oil into gasoline and other products, and sells these products to consumers. There are many other firms that extract and sell crude oil so that the market for crude oil is regarded by Acme Oil as competitive. The internal price that Acme Oil uses when the crude oil that it extracts is "sold" to one of its refineries:A) equals the market price for crude oil.
B) equals the market price for crude oil less a discount because Acme Oil does not to profit from itself.
C) is unrelated to the market price of crude oil.
D) is greater than the marginal cost of extracting crude oil.
Answer
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Related questions
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A) NPV is overstated
B) NPV is understated
C) NPV is unaffected
D) NPV changes from positive to negative
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For net present value calculations, the rate of return that one could earn by investing in another project with similar risk is known as the:
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B) nominal interest rate.
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Q:
If the inflation rate falls and nominal interest rates are unchanged,
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If an individual has $10,000 in a savings account paying 3% and the inflation rate is 2%, the nominal interest rate is
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Q:
The real interest rate is
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Q:
The first term in an NPV calculation is usually
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Q:
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Q:
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D) Both decline.
Q:
Suppose a labor market has perfectly inelastic supply that is composed of union and non-union workers, and both groups of workers initially earn the perfectly competitive wage. What happens to the equilibrium employment level and wage for union workers if the union exercises its bargaining power?
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Q:
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Q:
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Q:
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Q:
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B) Everyone
C) The last factor of production hired
D) The inframarginal workers
E) Only owners of physical properties earn economic rents
Q:
Scenario 14.4:
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TP = 100L - 0.125L2 MP = 100 - 0.25L
where L is the amount of labor employed. The supply curve for labor and the marginal expenditure curve for labor are given as follows:
L = PL -5 MEL = 2L + 5
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A) Marginal product of labor
B) Marginal revenue product of labor
C) The supply of labor
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Q:
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Q:
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Under an upward sloping supply curve for land, the economic rents to land ________ as the demand for land shifts rightward.
A) decrease
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D) We do not have enough information to answer this question.
Q:
Which of the following is NOT true about the supply of labor to the firm in a competitive labor market?
A) It is horizontal.
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Q:
Use the following statements to answer this question:
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D) I and II are false.
Q:
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Q:
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Q:
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Q:
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Q:
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A) can increase profit by reducing the employment of the factor of production.
B) is now maximizing profit.
C) should not use this factor of production because it has no potential in generating a profit.
D) can increase profit by expanding the employment of the factor of production.
Q:
An increase in technology that enhances labor productivity will likely result in:
A) a decrease in labor employment and an increase in the wage rate.
B) an increase in labor employment and an increase in the wage rate.
C) a decrease in labor employment and a decrease in the wage rate.
D) an increase in labor employment and a decrease in the wage rate.
E) employers using less labor and more capital while the wage effect is unknown.
Q:
Scenario 14.2:A firm can hire labor at the minimum wage of $4.25 per hour. Assume that labor works 8 hours a day. The firm's production function is as follows:Number of Days Number of Units of Labor of Output 0 0 1 8 2 15 3 21 4 26 5 30Refer to Scenario 14.2. What is the average product of the 4th worker?A) 4B) 5C) 6D) 6.5E) 7
Q:
If leisure is a normal good, then the income effect of a decrease in wage will
A) decrease the number of hours worked.
B) increase the number of hours worked.
C) decrease the number of leisure hours.
D) increase the sum of leisure plus hours worked.
Q:
The marginal revenue product can be expressed as the
A) additional revenue received from selling one more unit of product.
B) increment to revenue received from one additional unit of input hired.
C) marginal physical product of an input times the average revenue received from the sale of the product.
D) average physical product of the input times the marginal revenue received from the sale of the final product.