A firm in short-run equilibrium always earns positive profits if
A. AC > P > AVC.
B. AR > AC.
C. MR = MC.
D. AC > MC.
Answer: B
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Two firms, Acme and FirmCo, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below.Process(smoke/day) A(10 tons/day) B(8 tons/day) C(6 tons/day) D(4 ton/day) E(2 tons/day) Cost to Acme ($/day) $750$800$1,000$1,400$2,000 Cost to FirmCo ($/day) $500$750$1,200$2,200 $4,000Suppose the firms are both currently using process A. If the government requires each firm to reduce pollution by 20%, then the firms will adopt process ________, and a total of ________ tons of smoke will be emitted each day.
A. B; 16 B. A; 18 C. C; 12 D. D; 8
If you withdraw currency from your checking account for cash, you are
A) increasing M1, decreasing M2. B) increasing both M1 and M2. C) decreasing both M1 and M2. D) not affecting M1 or M2. E) increasing M1 but not affecting M2.
The most frequently used experimental or observational data in econometrics are of the following type:
A) cross-sectional data. B) randomly generated data. C) time series data. D) panel data.
You decide to buy your friend lunch after she helped you study for your exam. This is an example of the economic concept of:
A. marginal utility. B. reciprocity. C. altruism. D. a Veblen good.