Adam Smith describes a visit to a car factory when discussing economies of scale in his book An Inquiry into the Nature and Causes of the Wealth of Nations
a. True
b. False
Indicate whether the statement is true or false
False
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At the profit-maximizing level of output for a pure monopoly ________.
A. price is less than marginal cost B. total revenue is greater than total cost C. price is equal to marginal cost D. price is greater than marginal cost
Perfect competition implies that
A) there are many firms in the market. B) all firms are price takers. C) all firms are producing the same identical product. D) All of the above answers are correct.
Three hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the formula TC = 1,000Qmill + (Qmill)2, where Qmill indicates the mills annual production in thousands of tons. The marginal external cost of a mill's production (in dollars) is given by the formula MEC = 200 + 2Qmill. Finally, annual market demand (in thousands of tons) is given by the formula Qd = 200,000 - 100P. What is the efficient quantity?
A. 34,286 B. 131,429 C. 1,200 D. 90,000
Suppose the economy is on the classical range of the aggregate supply curve and has a problem with inflation. According to Keynesian theory, which of the following is an appropriate discretionary fiscal policy to use in this situation?
a. A reduction in the money supply. b. Less government regulation. c. Increase federal spending. d. Higher taxes.