The profit maximizing rule MR = MC applies to:
A. perfectly competitive firms only.
B. monopolists only.
C. imperfectly competitive firms only.
D. all firms.
Answer: D
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OPEC has had a sustained effect on the price of oil since it was first founded in 1960
Indicate whether the statement is true or false
When the economy swings back toward the boom part of a business cycle which of the following will generally not occur?
A. Labor demand will increase. B. Cyclical unemployment will decrease. C. Actual wages will approach the market-clearing level. D. Labor supply will decrease.
Individual members of a cartel have an incentive to ____ the cartel agreement because pursuit of ____ will maximize individual profit
a. adhere to; self-interest b. cheat on; collective interest c. cheat on; self-interest d. adhere to; collective interest
Assume fixed costs are 470 and labor costs $20 per unit. The first laborer produces 20 units of output. Subsequent hires add 5 units less to production than the previous worker. Thus the second worker adds 15, the third adds 10 etc. What is the average variable cost of output when one worker is hired?
A. 20 B. 24.50 C. 1 D. None of these is the correct AVC.