Decreasing returns to scale may occur as increasing the amount of inputs used
A) increases specialization.
B) always increases the amount of output produced.
C) may cause coordination difficulties.
D) increases efficiency.
C
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What happens when wages are set by law above the equilibrium level?
a. Firms employ fewer workers than they would at the equilibrium wage. b. Firms employ more workers than they would at the equilibrium wage. c. Firms tend to try to break the law and hire people at the equilibrium level. d. Firms hire more workers but for fewer hours than they would at the equilibrium wage.
Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. 
Suppose a timing element is added to the game, and that Jordan buys a ticket first. Then, after seeing Jordan's choice, Lee buys a ticket. What will be the equilibrium outcome?
A. Both Jordan and Lee will buy a ticket to the documentary. B. Both Jordan and Lee will buy a ticket to the comedy. C. Jordan will buy a ticket to the documentary and Lee will buy a ticket to the comedy. D. Jordan will buy a ticket to the comedy and Lee will buy a ticket to the documentary.