If a firm can maximize its profit by producing the output where price is equal to its marginal cost, the firm is operating in:
A. a perfectly competitive market.
B. an oligopolistic market.
C. a monopolistic market.
D. a monopolistically competitive market.
Answer: A
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Three hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the formula TC = 1,000Qmill + (Qmill)2, where Qmill indicates the mills annual production in thousands of tons. The marginal external cost of a mill's production (in dollars) is given by the formula MEC = 200 + 2Qmill. Finally, annual market demand (in thousands of tons) is given by the formula Qd = 200,000 - 100P. Which of the following gives the market supply curve?
A. Qs = 200,000 - 100P B. Qs = 0.5P - 500 C. Qs = 150P - 150,000 D. Qs = 150P - 30,000
Refer to Figure 12-8. Suppose the firm produces 4,000 units. What does the shaded area labeled A represent?
A) total revenue B) total fixed cost C) profit D) total variable cost
In the Interest Parity Condition, Rt - R t = ( - Et)/Et + xt, where Rt - R t is the interest rate differential and ( - Et)/Et is the expected change in the exchange rate, what does xt stand for if it potentially is a market efficient difference
between the two? A) market inefficiency B) risk premium C) forecast error D) tracking error E) excessive volatility
In the Keynesian region of the aggregate supply curve:
a. increases in aggregate demand are associated with decreases in output, but not with increases in prices. b. decreases in aggregate demand are associated with increases in prices, but not with increases in output. c. increases in aggregate demand are associated with increases in output, but not with increases in prices. d. decreases in aggregate demand are associated with increases in output, but not with increases in prices. e. increases in aggregate demand are associated with increases in prices, but not with increases in output.