The mainstream orthodox treatment of the firm is based on the assumption of:
(a) Sales maximization.
(b) Revenue maximization.
(c) Profit maximization.
(d) None of the above.
Answer: (c) Profit maximization.
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The value of the x-coordinate of a point in a graph is the length of a line from the point to the
A) origin. B) scalar. C) x-axis. D) y-axis.
Suppose a monopolist is producing a level of output such that MR > MC. What should the firm do to maximize its profits?
A) The firm should do nothing — it wants to maximize the difference between MR and MC in order to maximize its profits. B) The firm should hire less labor. C) The firm should increase price. D) The firm should increase output.
When state universities charge higher tuition fees to out-of-state students than to local students, the universities are practicing
A) first-degree discrimination. B) second-degree discrimination. C) third-degree discrimination. D) fourth-degree discrimination.
Government action can cause a significant market demand shift.
Answer the following statement true (T) or false (F)