If a perfectly competitive firm can sell each unit of output for $9, and the marginal cost of the last unit produced is $8.50, then the:
A. firm should lower its output level in order to increase profits.
B. firm is earning an average profit of $0.50.
C. extra benefit of the last unit produced is greater than the extra cost.
D. extra benefit of the last unit produced is less than the extra cost.
Answer: C
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The official Federal Reserve strategy for implementing its monetary policy objectives is spelled out in the
A) Federal Reserve Board (FRB) Decree. B) Federal Reserve Bank Cooperative (FRBC) Proposal. C) Federal Advisory Committee (FAC) Statement. D) Federal Open Market Committee (FOMC) Directive.
Which statement is true?
A. State and local governments are expected to provide more and more services while their tax bases are limited. B. State and local governments are expected to provide less and less services while their tax bases are relatively unlimited. C. Public education has traditionally been the role of the federal government. D. None of these statements are true.
Refer to Figure 17-4. Which of the following is true if the wage rate increases from W1 to W2?
A) The substitution effect becomes larger than the income effect. B) The income effect becomes larger than the substitution effect. C) The supply curve is unit elastic. D) The income effect and the substitution effect are equal.
Suppose that C = $700, I = $200, G = $200, NX = $100, and that the money supply is equal to $400. Based upon these assumptions, velocity is equal to ________________. If consumption and velocity both rise beyond their initial levels, then it follows that another component of spending ___________ necessarily fall
A) 3; must B) 3; does not C) 4; must D) 4; does not