A competitive firm maximizes profits when price equals marginal cost.
a. true
b. false
Answer: a. true
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How does the production possibilities frontier illustrate opportunity cost?
What will be an ideal response?
Discuss the correct and incorrect economic analysis in the following statement
"The United Auto Workers Union has successfully negotiated a 9 percent increase in wages for its workers. This increase in the wage rate causes an increase in demand for automobiles, since many consumers now have greater incomes, and also a decrease in the supply of automobiles because the cost of production has increased. These effects cancel each other out resulting in no change in equilibrium price and quantity in the automobile market."
Which of the following statement is untrue?
A) assets equal liabilities plus net worth B) households and firms are lenders and borrowers in the flow of funds C) government regulation is the major cause of asymmetric information problems D) pension funds and insurance companies are financial intermediaries
The scientific method is applicable to studying
a. natural sciences, but not social sciences. b. social sciences, but not natural sciences. c. both natural sciences and social sciences. d. None of the above is correct.