If a potato farmer expands output, he finds that the increase in total revenue is less than the increase in total costs. This means that:
A. profit is being maximized.
B. he should not have expanded output.
C. he should produce even more output.
D. the firm is wasting resources.
Answer: B
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By definition, economics is the study of
A) how to make money in a market economy. B) the choices people make to attain their goals, given their scarce resources. C) how to make money in the stock market. D) supply and demand.
Since its inception in 1913, there have been many revisions to the income tax code.
A. True B. False C. Uncertain
Spacely Sprockets, Inc, usually pays $1,000 for a million flanges, which it uses as inputs in the manufacture of sprockets. It also spends an average of $20 per million flanges on finding manufacturers and negotiating contracts. Spacely is capable of making its own flanges at a cost of $980 per million. Given these costs,
a. Spacely should continue to contract out for flanges b. Spacely should start to manufacture its own flanges c. it's not possible to say what Spacely should do d. Spacely should stop paying the additional $20 to find and negotiate contracts and just buy the flanges outright for $1,000 per million e. Spacely should move away from the use of flanges and toward an input that it can produce by itself
Firms have the option of maximizing sales revenue or maximizing profits. If a firm chooses to maximize sales, then it will produce
a. more output and charge a lower price. b. the same output and charge a lower price. c. less output and charge a higher price. d. less output and charge a lower price.