In the case of a linear demand curve, average revenue is equal to price, while (with the exception of Q = 1 ) marginal revenue is less than price
Indicate whether the statement is true or false
TRUE
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Employers may choose to pay efficiency wages that are higher than the equilibrium wage because
a. workers will be more willing to accept monitoring by their employers. b. the threat of unemployment will help prevent workers from shirking. c. the higher compensation will encourage workers to take more risks. d. higher wages will attract only the most qualified workers and thus help solve the employer's adverse selection problem 2.
If a perfectly competitive wheat farmer is maximizing its profit and then increases its output, the farmer's
A) total revenue increases, but total cost rises by more so that the farmer's total profit decreases. B) total revenue decreases and total cost increases, both thereby decreasing the farmer's total profit. C) total revenue does not change but total cost increases, thereby decreasing the farmer's total profit. D) marginal revenue increases, but so does marginal cost, so that the farmer's total profit increases. E) total revenue and total cost both rise, but the effect on the farmer's total profit is uncertain.
The minimum point of the average total cost curve is called the efficient scale
a. True b. False Indicate whether the statement is true or false
Table 5.1National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$4,565Exports$740Government purchases of goods and services$1,465Social Security taxes$510Net investment$225Indirect business taxes$520Imports$825Gross investment$865Corporate income taxes$185Personal income taxes$750Corporate retained earnings$45Net foreign factor income$20Government transfer payments to households$690Net interest payments to households$0On the basis of Table 5.1, gross domestic product is
A. $6,995 billion. B. $6,340 billion. C. $6,170 billion. D. $7,080 billion.