Suppose the utility function for a firm manager is U = ? + bQ, where Q is output, ? is profit, and b is a negative constant. How would the firm's output compare with what it would be if the manager's objective was to maximize profit?
A. It would be the same as the profit-maximizing output.
B. It would be less than the profit-maximizing output.
C. It would be greater than the profit-maximizing output.
D. None of the statements is correct.
Answer: B
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Refer to Figure 27-11. If government purchases increase by $100 billion and lead to an ultimate increase in aggregate demand as shown in the graph, the difference in real GDP between point A and point B will be
A) less than $100 billion. B) $100 billion. C) more than $100 billion. D) There is insufficient information given here to draw a conclusion.
In long-run equilibrium, which of the following is not equal to price for a perfectly competitive firm?
a. Short-run average variable cost. b. Long-run average total cost. c. Short-run marginal cost. d. Short-run average total cost.
Which of the following statements is correct for an open economy with a trade surplus?
a. The trade surplus cannot last for very many years. b. The trade surplus must be offset by negative net capital outflow. c. The trade surplus implies that the country's national saving is greater than domestic investment. d. None of the above is correct.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point C to Point B, ________ additional LCD TVs could be produced when the production of OLED TVs is reduced by 20.
A. exactly 30 B. exactly 60 C. fewer than 30 D. more than 30