Suppose a firm produces the level of output at which the marginal cost of the last unit produced equals the price of the good. Which of the following statements is always true?
A. The firm should produce more if its economic profit is positive.
B. The firm should shutdown if its total revenue is less than its variable cost.
C. The firm will earn a positive economic profit.
D. The firm is maximizing its profit.
Answer: B
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The figure above shows the U.S. demand and U.S. supply curves for cherries. In the absence of international trade, how many pounds of cherries would U.S. farmers produce?
A) 200,000 pounds B) 400,000 pounds C) 600,000 pounds D) 800,000 pounds E) 0 pounds
Which of the following could be an example of a question that would be studied in microeconomics?
A. Why did our economic growth rate slow down during the 2000s? B. How did the recession end in 2009 if unemployment continued to rise? C. How will the legalization of marijuana in Colorado affect the market for cigarettes? D. When should Congress raise taxes in order to tackle the debt crisis?
What type of business has been created when one firm is able to supply the total quantity demanded in a market at lower costs than two or more firms could produce?
a. Natural monopoly b. Artificial monopoly c. Anti-trust monopoly d. Regulatory monopoly
The principal result of the rising value of the U.S. dollar in the mid-1990s was the
a. lower foreign inflation. b. lower U.S. interest rates. c. opportunities for currency speculation. d. attractive investments in U.S. technology.