When the marginal cost of a price-taking firm is less than the market price of its product, the firm should:
a. expand output (provided that price is not less than average variable cost).
b. reduce output (provided that price is not less than average variable cost).
c. maintain output (provided that price is not less than average variable cost).
d. charge more than the market price.
a
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A prisoner's dilemma illustrates situations in which:
A. resources with the lowest opportunity cost should be used first. B. there is a conflict between the narrow self-interest of individuals and the broader interests of a group. C. everyone does best when each person specializes in the activities in which he or she has a comparative advantage. D. efficiency is an important social goal.
The most common form of trading goods for goods is
A. bilateral trade. B. government commodity distribution. C. status-based trades. D. barter. E. payments in kind.
We define autonomous expenditure to be expenditure that:
A. depends on how much income changes in the economy. B. that changes under the guidance of the government. C. is unaffected by the current level of income in the economy. D. people make that pertains to the auto industry.
Which of the following is true?
a. As the national debt increases relative to GDP, interest on the debt relative to GDP declines. b. As the national debt decreases relative to GDP, interest on the debt relative to GDP rises. c. As the national debt increases relative to GDP, interest on the debt relative to GDP rises. d. The national debt relative to GDP has been constant in recent years. e. The national debt relative to GDP has been falling in the last few years.