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Question
Trisha's Fashion Boutique sells earrings and pendants. Trisha has two types of customers. Their willingness-to-pay for earrings and pendants are given in the table below. If Trisha bundles the earrings and pendants together, could she increase revenue?| Earrings | Pendant | |
| Type I | 100 | 65 |
| Type II | 90 | 75 |
Answer
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Related questions
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Q:
Your firm is evaluating a potential investment in new machinery, but the manager in charge of the project uses an opportunity cost of capital that is too large. How does this error affect the projected net present value of the firm's investment?
A) NPV is overstated
B) NPV is understated
C) NPV is unaffected
D) NPV changes from positive to negative
Q:
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.
C) prime interest rate.
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Q:
If the inflation rate falls and nominal interest rates are unchanged,
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Q:
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:
The "NPV Criterion" is that a firm should invest in a new capital project if
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Q:
Which of the following is NOT a factor that has contributed to declining private-sector differential between union and nonunion wages in the U.S. since 1980?
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B) Improved ability of firms to substitute capital for labor in production
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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 non-union workers if the union exercises its bargaining power?
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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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B) the United Auto Workers union in the market for auto worker services.
C) OPEC in the market for crude oil.
D) all of the above
Q:
Who does NOT earn economic rent in a competitive factor market?
A) No one
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
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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
D) All of the above will shift due to the tax on output.
Q:
In a competitive labor market, the supply of labor curve is expressed as:AE = $5 + 0.0025L,where AE represents the average expenditure ($/unit) and L represents units of labor hired per unit of time. The demand for labor is based on the following expression:MP = 5 - 0.001L,where MP represents marginal product of labor. Revenue from the final good is $5 per unit sold in a competitive market.a. Determine the equilibrium wage rate and labor employment rate.b. Compute the economic rent earned by labor.
Q:
Suppose the supply and demand of land for natural gas extraction are imperfectly elastic. Given that coal is a potential substitute for natural gas in energy applications, a change in the price of coal may shift the demand curve for natural gas. What happens to the economic rents assigned to land on which natural gas is extracted if the price of coal declines?
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D) Rents are zero before and after the change
Q:
Under an upward sloping supply curve for land, the economic rents to land ________ as the demand for land shifts rightward.
A) decrease
B) increase
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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?
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B) It is perfectly elastic.
C) It is equal to the marginal expenditure curve.
D) It is upward sloping.
Q:
Use the following statements to answer this question:
I. Under profit maximization, the quantity of labor used in production is optimal if MR = w/MPL.
II. The expression MR = w/MPL implies that the revenue earned from the last unit of output produced equals the marginal cost of the last unit of output.
A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.
Q:
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Q:
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Q:
The Acme Company is a perfect competitor in its input markets and its output market. Its average product of labor is 30, the marginal product of labor is 20, the price of labor is $20, and the price of the output is $5. For Acme Company, the marginal revenue product of labor
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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.