Firms in perfectly competitive markets who wish to maximize profits should:
A. keep producing more as long as marginal cost is less than marginal revenue.
B. produce less as long as marginal cost is greater than marginal revenue.
C. produce where marginal cost and marginal revenue are equal.
D. All of these are true.
D. All of these are true.
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Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds
Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?
Which balance of payments measure shows best if a nation is paying its own way?
a. Trade balance b. Balance on goods, services, and income c. Reserves account. d. Net errors and omissions account e. Net transfers account
Suppose the US imposes tariffs on China, which retaliates with tariffs of its own. The ensuing trade war causes both countries to begin producing goods at higher costs than before because of the loss of comparative advantage. Assuming the IS curve does not shift, in general equilibrium, the outcome is a ________ level of output and a ________ real interest rate.
A. lower; higher B. higher; lower C. lower; lower D. higher; higher