A perfectly competitive firm will maximize profits when
A) average cost is greater than marginal revenue.
B) marginal cost is greater than marginal revenue.
C) marginal cost is equal to marginal revenue.
D) average cost is equal to average revenue.
Answer: C
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Under a fixed exchange rate system, if the inflation rate in the United States is 0 percent a year and the inflation rate in Australia is 5 percent a year, then the U.S. real exchange rate will
A) may increase or decrease. B) decrease 5 percent a year. C) remain constant. D) increase 5 percent a year.
Refer to the scenario above. If the best response of one bidder is to place a bid of $9,000, what is her maximum willingness to pay for the necklace?
A) $10,000 B) $9,000 C) $4,500 D) $18,000
Countries like Malaysia and Thailand that tried to maintain overvalued currencies in the late 1990s inevitably faced increased
a. balance of payments surpluses. b. runs on their currencies. c. balance of payments deficits. d. both b and c.
Variable costs:
A. do not vary with output. B. are positive even when a firm produces no output. C. change as output changes. D. exist only in the short run.