A firm that maximizes profits also
A) is inefficient.
B) cuts corners in production processes so that its products are made too cheaply.
C) uses the least-cost combination of resources.
D) pays input prices lower than other firms do.
Answer: C
You might also like to view...
Use the following graph to answer the next question.
It depicts an economy in the ________.
A. current year B. short run C. current month D. long run
On the graph above, an increase in government spending, with no change in taxes, is likely to move the economy from point 1 to point ________
A) 8 B) 6 C) 3 D) 5
Which of the following leads to a fundamental difficulty for stabilization policy?
A. Time lags in policy decisions B. Presence of shock absorbers in the economy C. Absence of data on the effectiveness of policy measures D. Existence of self-correcting mechanism
Empirical evidence with respect to the labor supply decision suggests that the substitution effect seems to dominate for most people, which means that the aggregate labor supply responds ________ in the wage rate.
A. positively to a decrease B. independently from an increase or a decrease C. negatively to an increase D. negatively to a decrease