How should firms in perfectly competitive markets decide how much to? produce? Perfectly competitive firms should produce the quantity where
Ans: Perfectly competitive firms cannot control price and are consequently price takers. Economists assume that the objective of such firms is to maximize profit? (total revenue minus total? cost).
?Therefore, to maximize? profit, a firm should produce the quantity of output where the difference between total revenue and total cost is as large as possible.
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Explain why some economists claim that the persistence of high unemployment rates during the recovery from the recession of 2007–2009 is evidence of "hysteresis."
What will be an ideal response?
In the above table, what is the marginal physical product of worker 2?
A) 10 B) 18 C) 11 D) 9
A manager of a firm with market power faces the marginal revenue product and average revenue product curves shown below. The firm incurs weekly fixed costs of $1,800. The firm employs a single variable input, labor, which costs $600 per worker each week.
Given the above, suppose the weekly wage rate increases to $1,400 per worker. The firm would hire ________ workers and earn a profit of ________ per week.
A. 6 ; $6,000 B. 6 ; $4,800 C. 6 ; $8,400 D. 0 ; -$1,800 E. 6 ; -$2,400
Suppose that the maximum price for rent in New York City is set above the equilibrium price. Which of the following statements is incorrect?
A. It reduces the quantity supplied. B. It increases the quantity demanded. C. Consumers want to buy more than producers want to sell. D. All of these are incorrect.