A competitive firm will maximize profit by producing the level of output at which
A. the firm's total revenue exceeds total cost by the largest amount.
B. the additional revenue from the last unit of output produced exceeds the additional cost of the last unit by the largest amount.
C. the last unit of output produced adds the same amount to total revenue as to total cost.
D. both a and b
E. both a and c
Answer: E
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Bureaucrats who believe in the mission of their bureaus will want to maximize their bureau's budgets to further their perception of the public interest
a. True b. False
Refer to the data provided in Table 10.2 below to answer the following question(s).
Table 10.2 
Refer to Table 10.2. The firm currently employs 4 workers at the market wage of $120 per worker per day. If the firm wants to maximize its profits, it should
A. shut down since it is incurring a loss. B. hire fewer workers C. make no adjustments as it is already employing the profit-maximizing number of workers. D. hire more workers.
Refer to the diagram. With MB 1 and MC 1 , society's optimal amount of pollution abatement is:
A. Q 1 .
B. Q 2
C. Q 3 .
D. Q 4 .