A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 1,000 units is $2.50. The minimum possible average variable cost is $2. The market price of the product is $2.50. To maximize profits, the firm should
A. increase production to more than 1,000 units.
B. decrease production to less than 1,000 units.
C. continue producing 1,000 units.
D. shut down.
Answer: C
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Someone who knows nothing about the relative quality of a $2 toothbrush and a $7 toothbrush, both available for sale, but chooses to buy the more expensive one, is probably
A) displaying an inelastic demand for toothbrushes. B) judging quality by price. C) violating the law of demand. D) wealthy enough not to care about prices.
A bond with default risk will always have a ________ risk premium and an increase in its default risk will ________ the risk premium
A) positive; raise B) positive; lower C) negative; raise D) negative; lower
If an event is likely to occur, which probability is a reasonable estimate?
A) 0.32 B) 0.79 C) 1 D) Not enough information to determine.
In Brown v. Board of Education, the Supreme Court ruled that segregated facilities were inherently unequal
Indicate whether the statement is true or false