Under what condition are profits maximized?
A) at the rate of output at which marginal revenue equals marginal cost
B) at the output rate where marginal cost is greater than marginal revenue
C) at the point at which the difference between total revenues and total costs is negative
D) at the point at which the difference between price and quantity demanded is greatest
Answer: A
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Complete this sentence: in a market system income is generally earned
A) independently of acts of exchange and production. B) arbitrarily and randomly. C) unproductively. D) in the process of its creation.
Which of the following arguments for trade restrictions is often advanced?
a. Trade restrictions make all Americans better off. b. Trade restrictions increase economic efficiency. c. Trade restrictions are necessary for economic growth. d. Trade restrictions are sometimes necessary for national security.
When the market price is set above the equilibrium price:
A. the market is not efficient. B. consumer surplus is decreased. C. total surplus is not maximized. D. All of these are true.
In the Keynesian model with both a variable price level and money wage, the aggregate supply function will be
a. upward sloping but flatter than for the variable-price/fixed-wage version of the model. b. upward sloping but steeper than for the variable-wage/fixed-price version of the model. c. vertical. d. horizontal.