In order to maximize its profits, a price-taking firm should produce the level of output at which:
A) total revenue = total cost.
B) average revenue = average cost.
C) variable revenue = variable cost.
D) marginal revenue = marginal cost.
D
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The production of a certain fertilizer emits a gas that keeps away mosquitoes and other insects from the surrounding community. This is an example of a ________
A) positive externality B) negative externality C) pecuniary externality D) comparative externality
Explain the relationship between the interest rate on a bond and the default risk on a bond
What will be an ideal response?
Firms that are most likely to buy marketable pollution rights are those that produce the most pollution per unit of output produced
Indicate whether the statement is true or false
A level of insurance is said to be actuarially fair when in which of the following situations?
a. Premiums that someone pays are less than the amount that an average person in that risk group would collect in insurance payments. b. Everyone in a risk group pays the same amount regardless of insurance payments collected. c. Premiums that someone pays are equal to the amount that an average person in that risk group would collect in insurance payments. d. Everyone in a risk group pays more than the average person in that risk group would collect in insurance payments.