Which of the following is a common long-run response for a firm that is making a profit in the short run?
a. It will invest more resources in other firms.
b. It will cut back the firm’s resources.
c. It will invest more resources in the profitable process.
d. It will keep allocation of the firm’s resources the same.
c. It will invest more resources in the profitable process.
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Which of the following factors has greatly facilitated international trade since World War II?
A. Increased nontariff barriers B. Increased import quotas C. Improved transportation D. Expanded export subsidies
Matt is offered a job driving the campus shuttle bus from 4 p.m. to 6 p.m. each Monday. His reservation wage for this job is $7 per hour. Now suppose the director offers Matt $50 per hour, but also announces that the earnings from the job will be divided equally among Matt and four other students. Will Matt accept this job?
A. Yes, because $50 divided by five is greater than Matt's reservation wage. B. No, because it is not fair for Matt to do the work and then have to share the wage. C. No, because the other students are free riders. D. Yes, because Matt believes in the Rawlsian theory of justice.