For a firm in a perfectly competitive market, if it produces where marginal cost exceeds marginal revenue it:
A. should cut back production to increase profits.
B. should increase production to increase profits.
C. is producing a profit-maximizing quantity.
D. is impossible to tell if it is actually maximizing profits.
A. should cut back production to increase profits.
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The development of new technology reduces the cost of producing calculators. In addition, assume that consumers have cut back on their scheduled purchases in anticipation of further cost-saving developments. As a result, we can expect
A. a decrease in price but no predictable change in output. B. a decrease in output but no predictable change in price. C. an increase in output but no predictable change in price. D. a predictable decrease in both output and price.
Many reporters in the media were critical of the high interest rates that many banks charged to lenders in the so-called sub-prime market. Using economic reasoning what was the likely justification for these high interest rates
What will be an ideal response?
The rules for respecting property rights as they relate to trade were negotiated during the Uruguay Round (1986-1994 ) and culminated in the Trade Related Aspects Intellectual Property Rights (TRIPS) agreement
Indicate whether the statement is true or false
In the efficiency wage model, if the real wage is higher than the market-clearing wage so that there is an excess supply of labor
A) firms will hire new workers at lower wages. B) firms will replace high-paid workers with low-paid, formerly unemployed workers. C) employers will not hire workers who are willing to work for a lower wage. D) firms will demand a higher level of effort from existing employees.