Economists assume that the goal of a firm is to
A. sell as many units as possible.
B. maximize gross revenues.
C. maximize economic profits.
D. be the largest firm in its industry.
Answer: C
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When comparing tax and spending policy by the government, in general we note that the tax policy multiplier effect relative to the spending multiplier should be:
A. larger. B. smaller. C. equivalent. D. not comparable.
The formal study of economics began when Adam Smith (1723-1790) published his famous book The Wealth of Nations in 1776. In the first chapter of The Wealth of Nations, Smith introduces the idea of the division of labor. Define "division of labor" and illustrate with an example.
What will be an ideal response?
Over the past several decades there has been rapid growth in international trade. This growth has been due to all but one of the following factors. Which factor has not contributed to the growth of international trade?
A) a change in the tariffs charged on many goods B) favorable changes in government policies C) a reduction in shipping costs D) the spread of reliable communications
Suppose a cost function is TC = Aq3 + bq2 + cq + d. Then the average variable cost is
a. Aq2 + bq + cq +d/q b. Aq2 + bq + c c. Aq3 + bq2 + cq d. d