When marginal cost exceeds marginal revenue,
A. marginal profit < 0.
B. the firm should increase output.
C. marginal profit + marginal cost > marginal revenue.
D. marginal cost < marginal revenue - marginal profit.
Answer: A
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Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. The value of autonomous consumption is
A) 10. B) 40. C) 50. D) 80.
In conditions of full employment
A) no one in or out of the labor force is unemployed. B) the only unemployment results from a normal frictions and structural mismatches in the labor market. C) the only unemployment results from cyclical swings in economic activity. D) no one in the labor force is unemployed.
A firm will not choose to produce if total variable costs exceed total revenue.
Answer the following statement true (T) or false (F)
What is the difference between the nominal interest rate and the real interest rate?
What will be an ideal response?