If MC>MR, the firm should produce
A. more than this quantity.
B. zero.
C. at this quantity.
D. fewer than this quantity.
Answer: D
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Allocations that are inefficient are sometimes chosen by policy makers as a way of improving fairness.
Answer the following statement true (T) or false (F)
Total fixed cost
a. increases as output increases. b. declines as output increases. c. is always zero. d. remains constant even if the firm shuts down.
Labor markets where power exists on both the demand side and the supply side are rare.
Answer the following statement true (T) or false (F)
Suppose that real domestic output in an economy is 2400 units, the quantity of inputs is 60, and the price of each input is $30. If productivity increased such that 3000 units are now produced with the quantity of inputs still equal to 60, then per-unit production costs would:
A. decrease and aggregate supply would increase. B. increase and aggregate supply would decrease. C. remain unchanged and aggregate supply would remain unchanged. D. decrease and aggregate supply would decrease.