The acronym MPC stands for:
A. marginal production cost.
B. marginal propensity to consume.
C. marginally perfect consumption.
D. macro production cost.
B. marginal propensity to consume.
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A straight-line production possibilities curve takes this shape because
A) the opportunity cost of producing a good is constant. B) the opportunity cost of producing more of a good is decreasing. C) resources are better suited for producing one output than another. D) resources are fixed.
For the monopolistic competitor, MR = P
a. True b. False Indicate whether the statement is true or false
The "invisible hand" refers to
a. the marketplace guiding the self-interests of market participants into promoting general economic well-being. b. the fact that social planners sometimes have to intervene, even in perfectly competitive markets, to make those markets more efficient. c. the equality that results from market forces allocating the goods produced in the market. d. the automatic maximization of consumer surplus in free markets.
Exhibit 7-5 A firm's MR and MC curves
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In Exhibit 7-5, a firm is currently producing 40 units of output. What would you advise this firm to do?
A. Shut down. B. Increase output. C. Decrease price. D. Decrease output.