Some environmental groups are on record suggesting that the price of gasoline should be much higher than it was in the early 1990s. Why might they say this?
A) They own stock in oil companies.
B) They anticipate that the longer the price is high, the more elastic the response by consumers will be.
C) They anticipate that the longer the price is high, the less elastic the response by consumers will be.
D) They anticipate that higher prices will reduce the price elasticity of supply of oil.
B
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Investors often pay professional analysts to gather and monitor information on the creditworthiness of borrowers because
A) federal law requires it. B) most investors are risk neutral. C) the cost of acquiring information about a borrower's creditworthiness can be high. D) doing so increases the net-of-tax yield on most investments.
If the marginal product of labor exceeds that cost of hiring an additional worker, the firm should ________
A) fire some workers B) raise the wage rate C) add more workers D) lower the wage rate