For an inferior good, the income and substitution effects
A) work together.
B) work against each other.
C) can work together or in opposition to each other depending upon their relative magnitudes.
D) always exactly cancel each other.
B
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The Value of Bonuses Oscar's Outdoor Signage employs salesmen to find new advertisers for existing signs. In an average month, salaried sales staff can keep 80 of 100 signs under contract in a given month. When Oscar experimented with a bonus of $100
for each sign under contract this was increased to 90 of 100 signs. How large must the contribution margin on a sign be to make it profitable to offer the bonuses?
Each seller's opportunity costs are:
A. determined monetarily, which is why they can never be zero. B. determined by a number of factors, none of which is monetary. C. determined by a number of factors, including monetary considerations. D. less than the monetary costs of manufacturing the good or service.