For the firm in Figure 8.1, the profit-maximizing (loss-minimizing) price and level of output are:
A) P2 and Q2.
B) P1 and Q1.
C) P4 and Q1.
D) P3 and Q1.
C
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Most of the pressure for a monetary growth rule has disappeared because since 1980
A) the relationship between movements in interest rates and movements in real GDP and the price level have become much weaker. B) the relationship between movements in the money supply and movements in real GDP and the price level have become much stronger. C) the relationship between movements in the money supply and movements in real GDP and the price level have become much weaker. D) the relationship between movements in interest rates and movements in real GDP and the price level have become much stronger.
If Jane works for 6 hours she can rent out 9 apartments, and if she works for 7 hours she can rent out 12 apartments. The marginal benefit of Jane's 7th hour of work equals:
A. 1 apartment B. 9 apartments C. 12 apartments D. 3 apartments
Refer to the above figure. The market equilibrium quantity is Q1. Point Q2 represents the optimal amount of production. This indicates that there is
A. a positive externality. B. a negative externality. C. regressive taxation of the product. D. a public good which should be produced.