All else constant, the choice of whether to use a labor-intensive production process or a capital-intensive one is depends on:
A) the absolute prices of capital and labor.
B) the relative prices of capital labor.
C) the type of market in which the firm operates.
D) whether the economy is growing or shrinking.
B
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A nonmonetary opportunity cost is called a(n) ________, while a cost that involves spending money is called a(n) ________
A) implicit cost; explicit cost B) normal rate of return; asset C) accounting profit; economic profit D) accounting cost; explicit cost
Tony's Italian Ice is a monopolistically competitive firm. If Tony's earns a profit in the short run, which of the following is most likely to occur?
A) New firms that sell Italian ice will enter the market and Tony's demand curve will shift to the right. B) New firms that sell Italian ice will enter the market and Tony's demand curve will become more inelastic. C) New firms that sell Italian ice will enter the market and Tony's cost curves will shift to the left. D) New firms that sell Italian ice will enter the market and Tony's demand curve will shift to the left.