A profit-maximizing firm will continue to expand output:
a. as long as the revenues from the production and sale of an additional unit exceeds the average cost of the unit.
b. until the average cost of producing the good or service is at a minimum.
c. as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit.
d. until the marginal cost of producing a good or service is at a minimum.
c
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Three individuals consume a public good, and their demands are expressed as:
P1 = 1.5 - 0.005Q (for Q < 300 ); P2 = 4.5 - 0.007Q (for Q < 643 ); P3 = 3.0 - 0.002Q (for Q < 1500 ), where P represents price in dollars per unit and Q represents output in units per day. The marginal cost of providing the service is given as a constant $5.00 per unit. Determine the efficient level of output of this public good.
Opportunity cost exists because
a. technology is fixed at any point in time b. the law of comparative advantage is working c. resources are scarce but wants are unlimited d. the value of lost opportunities varies from person to person e. efficiency is measured by the monetary cost of an activity
The technique that addresses the problem of assigning inputs to specific industries is
A. known as laissez faire. B. input-output analysis. C. cost-benefit analysis. D. a production possibilities frontier.
To keep high inflation from eroding the value of money, monetary authorities in the United States:
A. Create token money that is less than its intrinsic value B. Make paper money legal tender for the payment of debt C. Establish insurance on checkable deposit accounts D. Control the supply of money in the economy