Use the following graph to answer the next question.
The perfectly competitive firm will maximize profits if it produces and sells output at
A. A.
B. B.
C. C.
D. K.
Answer: C
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A competitive, unregulated market would
A) produce too much pollution because pollution is an external cost. B) produce too little education because education has an external benefit. C) fail to achieve equilibrium if there are externalities present. D) Both answers A and B are correct. E) Both answers B and C are correct.
In the above figure, a negative relationship is demonstrated in which of the graphs?
A) Figure A B) Figure B C) Figure C D) Figure D
To an economist, the term "needs"
A) means the purchase of necessary goods. B) is objectively undefinable. C) identifies the purchases of basic goods and services. D) refers to the purchase of goods by the poor.
If the economy is inflationary, the Fed would most likely:
a. encourage banks to provide loans by buying government securities. b. encourage banks to provide loans by raising the discount rate. c. encourage banks to provide loans by selling government securities. d. restrict bank lending by selling government securities. e. restrict bank lending by lowering the federal funds rate.