As long as marginal cost is decreasing, marginal product is
a. less than average product.
b. greater than average product.
c. equal to average output.
d. equal to total product.
QUESTION 2In this problem, demonstrate your knowledge of percentage rates of change of an entire demand function (HINT: Q = EPP + EYY). You have found that the price elasticity of motor control devices at Allen-Bradley Corporation is -2, and that the income elasticity is a +1.5 . You have been asked to predict sales of these devices for one year into the future. Economists from the Conference Board predict that income will be rising 3 over the next year, and AB's management is planning to raise prices 2. You expect that the number of AB motor control devices sold in one year will:
a. fall .5.
b. not change.
c. rise 1r.
d. rise 2.
e. rise .5.
QUESTION 3Smartphones at Work In most departments, Macy's clerks are paid an hourly rate. As a consequence, they would prefer to spend the time goofing off than helping customers. The store developed a number of policies to combat this preference. For example, supervisors roam the store breaking up congregations of employees who are gossiping. However, with the advent of smartphones, employees can pass the time surfing the web, playing games, or posting to social media. How can Macy's alter compensation so as to combat this new form of shirking?
QUESTION 4The marginal product curve is a mirror image of
a. The average cost curve
b. The average fixed cost curve
c. The total cost curve
d. The marginal cost curve
QUESTION 5If demand were inelastic, then we should immediately:
a. cut the price.
b. keep the price where it is.
c. go to the Nobel Prize Committee to show we were the first to find an upward sloping demand curve.
d. stop selling it since it is inelastic.
e. raise the price.
QUESTION 6Spyware The Dunder-Miflin Paper Company has been suffering an even greater spate of shirking by the accounting staff ever since its employees got access to the Internet on their desktop computers. How does installing spyware on computers reduce the shirking? How does it affect the rewards the company provides to employees for reaching performance measures?
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