Under the total revenue and total cost approach to profit maximization,
a. firms equate total variable cost to total revenue in order to maximize profit
b. profit is maximized when fixed cost falls to zero
c. firms choose the level of output at which total revenue is the greatest distance above total cost when the firm earns an economic profit
d. firms choose the level of output at which the changes in revenue and cost both equal zero
e. total revenue is maximized when profit is zero
C
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Refer to the above figure. If the union wants to maximize the total income of its members who work, it will set wages at
A) W1. B) W2. C) W3. D) W4.
Which of the following best describes the vicious cycle of poverty? a. Rich countries eventually decline because its citizens become lazy
b. Poor countries eventually improve through investment in education, infrastructure, and capital accumulation. c. Rich countries stay rich through continued high levels of investment in education, infrastructure, and capital accumulation. d. Poor countries stay poor because they cannot afford to invest in education, infrastructure, and capital accumulation.
Refer to the following graph. An increase in aggregate demand when the economy is already at full employment is reflected as a rightward shift of the aggregate demand curve from
a. aggregate demand would have to increase.
b. aggregate demand would have to decrease.
c. aggregate supply would have to increase.
d. aggregate supply would have to decrease.
The automatic stabilizers in the U.S. economy are sufficiently strong to prevent recessions
a. True b. False Indicate whether the statement is true or false