Suppose a perfectly competitive firm can increase its profits by increasing its output. Then it must be true that the firm's:
A. marginal revenue is less than its marginal cost.
B. marginal cost exceeds its marginal revenue.
C. price exceeds its marginal cost.
D. price exceeds its marginal revenue.
Answer: C
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In the life-cycle hypothesis, people are assumed to have a consumption pattern that leads them to save
A) at no point in their life. B) in the working years up to retirement. C) in their retirement years. D) in every year of their life.
For a nondiscriminating monopolist, describe the relationship between market price (P), average revenue (AR), and marginal revenue (MR)
a. P = AR = MR b. P > AR = MR c. P = AR > MR d. P > AR > MR e. P = AR < MR
In the circular flow model, businesses
A. demand both products and resources. B. supply both products and resources. C. demand products and supply resources. D. supply products and demand resources.
Workers in an economy are likely to be more productive if:
A) the economy has a high capital stock. B) the unemployment rate in the economy is low. C) the rate of inflation in the economy is high. D) the size of the population is high.