Suppose a perfectly competitive firm faces the following cost and revenue conditions: ATC = $25.50; AVC = $20.50; MC = $25.50; MR = $28.50. The firm should
A) decrease output.
B) increase output.
C) shut down.
D) continue to produce its current output.
Answer: B
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Interest is considered a(n)
A) explicit cost when the firm pays a bank to borrow money. B) implicit cost when the firm owner uses his or her own funds to buy capital. C) return to entrepreneurship if the firm owner uses her own funds to buy capital. D) form of depreciation if the cost of borrowing increases. E) Both answers A and B are true.
Which of the following is true? a. As long as human wants exceed available resources, scarcity will exist
b. Scarcity ultimately leads to competition for the available goods and services. c. Scarcity affects everyone to the same degree. d. Both a. and b. are true.
A factor of production is the same as
a. the amount of a good produced b. the price of a good c. a profit of a firm d. an opportunity cost e. a resource
Economists use basic psychological insights in the field of study called
a. psychological economics. b. transitional economics. c. behavioral economics. d. social economics.