The ________ elastic a firm's demand curve, the greater its ________
A) less; monopoly power
B) less; output
C) more; monopoly power
D) more; costs
A
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A U.S. firm currently produces 200 units of output according to the production function q = L0.5K0.5 and faces input prices equal to wU.S. = rU.S = $11. Should the U.S. firm move their company abroad where they will face input prices equal to wabroad = $6.50 and rabroad = $15.00?
A) Yes, because the total costs will fall from $3,859 to $2,810. B) No, because the total costs will increase from $2,810 to $3,859. C) No, because the firm has decreasing returns to scale. D) Not enough information is given to answer this problem.
The increased generosity of unemployment insurance programs in Canada as compared to the United States should
A) decrease the duration of unemployment in Canada as compared to the United States. B) increase the duration of unemployment in Canada as compared to the United States. C) have no impact on the duration of unemployment in Canada. D) raise the duration of unemployment in the United States.