If a firm's marginal cost exceeds its marginal revenue, then
a. the firm's profit is negative (i.e., the firm is suffering losses).
b. the firm should shut down its operations.
c. cutting back production will increase the firm's profit.
d. the firm should reduce its per-unit cost by increasing its output.
c. cutting back production will increase the firm's profit.
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Governments have to rely on taxes for financing because
A) they cannot borrow unlimited amounts. B) they usually spend all of the gold reserves. C) gold prices have fallen steadily over the years. D) they are not allowed to sell bonds.
When decisions are guided strictly by short-run gains, this is known as
A) opportunistic behavior. B) the prisoners' dilemma. C) tit-for-tat strategy. D) a positive-sum game.
When net capital flows are positive,
A) net foreign investment is negative. B) capital inflows are greater than capital outflows. C) capital outflows are greater than capital inflows. D) A and B are both correct.
Refer to the data. After a deposit of $10 billion of new currency into a checking account in the banking system, excess reserves will increase by:
Answer the question on the basis of the following consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 10 percent. All figures are in billions.
A. $0 billion.
B. $7 billion.
C. $9 billion.
D. $10 billion.