A profit-maximizing firm in a perfectly competitive market will always produce a quantity of output that:
a. minimizes the per-unit cost of production
b. is expected to maximize total revenue.
c. maximizes the amount by which total revenue exceeds total cost.
d. brings average total cost and price into equality.
c
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Dead capital is most likely to exist when
A) there are restrictions on imports. B) residents of a country face barriers to establishing legal ownership of resources. C) property rights are well-defined. D) there are restrictions on exports.
The social interest theory of regulation assumes that
A) regulations favor voters over producers. B) regulations promote the attainment of competitive output. C) public officials seek to keep their jobs. D) public officials favor consumers over producers.
The evolution of the payments system from barter to precious metals, then to fiat money, then to checks can best be understood as a consequence of
A) government regulations designed to improve the efficiency of the payments system. B) government regulations designed to promote the safety of the payments system. C) innovations that reduced the costs of exchanging goods and services. D) competition among firms to make it easier for customers to purchase their products.
The fourth step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity. b. decide whether the economic change being analyzed affects demand or supply. c. draw a demand and supply model before the economic change took place. d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.