The above figure shows a nation's production function. Point B is
A) unattainable.
B) attainable if the nation uses resources inefficiently.
C) attainable if the nation uses resources efficiently.
D) the maximum amount of real GDP the nation can ever produce.
E) Both answers C and D are correct.
C
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For a firm facing a downward sloping demand curve, marginal revenue
A) is at a minimum at the midpoint of the demand curve. B) is greater at higher prices than at lower prices. C) increases each time prices are lowered. D) falls each time prices are raised.
Consider an industry that is in long-run equilibrium. An increase in demand leads to a decrease in the price of the good. We know that this is
A) a decreasing cost industry. B) a constant cost industry. C) an increasing cost industry. D) not a competitive industry.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below. Acme Manufacturing: TC = 100 + 3Q. Generic Industries: TC = 500 + 3Q. When each firm is producing the same quantity, Acme's average total cost is:
A. lower than Generic's average total cost. B. equal to Generic's average total cost. C. lower than Generic's average total cost at some levels of output, and higher than Generic's average total cost at other levels of output. D. higher than Generic's average total cost.