Economists assume that a perfectly competitive firm's objective is to maximize its
a. revenue
b. quantity sold
c. economic profit
d. output price
Answer: c. economic profit
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What is an economic variable? Give an example of an economic variable
What will be an ideal response?
If a group of professionals successfully lobby the government to require workers in their profession to have a license, the most likely result will be a(n)
a. reduction in the supply of such professionals and a decrease in their wage rate b. reduction in the demand for such professionals and an increase in their wage rate c. reduction in the supply of such professionals and an increase in their wage rate d. reduction in the demand for such professionals and a decrease in their wage rate e. increase in the demand for such professionals and an increase in their wage rate
Which of these situations is most likely to cause the Fed to introduce a tight money supply?
(A) A recession has reduced aggregate demand and increased unemployment. (B) The economy is expanding quickly and inflation is a concern. (C) The economy is prosperous with relatively low inflation and low unemployment. (D) The federal government passes a new budget with a large deficit.
When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease. B. prices, causing them to definitely rise. C. output, causing it to definitely increase. D. prices, causing them to definitely fall.