To stimulate the economy, the government is likely to
A. increase spending.
B. restrict trade.
C. raise prices.
D. decrease expenses
A. increase spending.
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Marginal revenue is the addition to a firm’s revenue from
A. a $1 change in price. B. a one-unit change in output. C. the sale of inferior output. D. a $1 reduction in marginal cost.
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. Which of the following gives the price of cereal in terms of the price of milk?
A. Pc = 100 - (Pm/10) B. Pc = 8 - (Pm/10) C. Pc = 10 - (Pm/10) D. Pc = 10 + (Pm/10)
The amount that a seller is paid for a good minus the seller’s actual cost is called:
a. producer surplus. b. consumer surplus. c. total surplus. d. demand surplus.
Whenever average cost exceeds marginal cost,
a. average cost is rising. b. average cost is falling. c. marginal cost is rising. d. marginal cost is falling.