Author Question: MC increases because A) MC naturally increases as the firm nears capacity. B) labor is paid ... (Read 78 times)

OSWALD · **on:** Jul 1, 2018

MC increases because

A) MC naturally increases as the firm nears capacity.
B) labor is paid overtime wages when volume increases.
C) in the short run, MC always increases.
D) the law of diminishing returns takes effect.

Question 2

Bobby faces two choices. The first is to receive 600 on the spot. The other choice is to receive 800 a year from now. The interest rate is 5 per year. What could a possible explanation for Bobby choosing to receive 600 on the spot?

A) Bobby finds that the present value of the 800 a year from now is less than 600.
B) Bobby may have time-inconsistent preferences.
C) Although Bobby chooses 600 on the spot, he is actually indifferent between the two options.
D) None of the above is correct.