Which of the following best defines rational behavior?
A. Seeking to maximize total gain regardless of cost
B. Analyzing the total gains from a decision
C. Seeking to gain by choosing to undertake actions as long as the marginal costs exceed the associated marginal benefits
D. Improving net gain by pursuing decisions as long as the marginal benefits exceed the marginal costs
Answer: D
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Technological efficiency necessarily means producing
A) at minimum cost. B) with the highest level technology available. C) without using more inputs than necessary. D) technology itself.
A profit-maximizing firm's demand function for labor can be found by differentiating:
a. the profit function with respect to w. b. the cost function with respect to w. c. the supply function with respect to w. d. the production function with respect to w.
When a consumer spends income so that the ratio of marginal utilities (MUs) of all goods purchased equals the ratio of their prices, the consumer is
a. maximizing marginal utility b. spending too much on all goods c. maximizing total utility d. beyond the point of diminishing marginal utility e. behaving in opposition to the principal of rational behavior
The long-run exit rule is to exit the industry if:
A. P > AVC. B. P < AVC. C. P < ATC. D. P > ATC.