If an additional dollar spent on monitoring would reduce shirking by 10 minutes, then the firm will increase the worker's wage by $1 if this caused
A) shirking to increase by less than 10 minutes.
B) shirking to decrease by more than 10 minutes.
C) shirking to decrease by less than 10 minutes.
D) monitoring to become unnecessary.
B
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Coal is very useful in the production of electricity. Red beryl, although not generally considered as very useful, is a beautiful gemstone found in the mountains of Utah, and has been described as 1,000 times more valuable than gold
Explain why red beryl costs so much more than coal.
Suppose a firm can only vary the quantity of labor hired in the short run. An increase in the cost of capital will
A) increase the firm's marginal cost. B) decrease the firm's marginal cost. C) have no effect on the firm's marginal cost. D) More information is needed to answer the question.