If a firm in a perfectly competitive market faces the cost curves in the graph shown and observes a market price of $13, the firm:
A. should continue to operate in the short run, but plan to exit in the long run.
B. cannot make positive profits and should shut down in the short run.
C. can make positive profits by producing more than 35 units.
D. can make positive profits by producing where MC = MR.
Answer: A
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If average labor productivity increases, then the same number of employed workers will always produce:
A. more output per person. B. less output per person. C. less total output. D. more total output.
If an alternative provides a benefit of $8 to an individual at a cost of $6, the net benefits of the alternative equal:
A) $0.75. B) $48. C) $2. D) $14.
If the nominal money supply rises by 6 percent, the price level rises by 4 percent, and output rises by 3 percent, then according to the quantity theory equation, income velocity must rise by:
a. 7 percent b. 13 percent c. 1 percent. d. 3 percent.
The marginal product generated by an additional unit of input times the price of the output is called:
A. the value of the marginal product. B. the marginal revenue product. C. Both of these statements are true. D. Neither of these statements is true.