Ajax has just discovered that the marginal revenue product generated by the last worker hired was $50 while the marginal factor cost was $50. What should Ajax do?
A) Leave the level of production unchanged.
B) Increase the amount produced.
C) Reduce the amount produced.
D) Collect more information before making a decision.
A
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Suppose a country has no trade with other countries and people can borrow as many funds as they want at the current interest rate. An increase in the price level will generate
A) a decrease in total planned real expenditures because of the real-balance effect. B) a decrease in total planned real expenditures because the indirect effect will be stronger than the real-balance effect. C) a decrease in total planned real expenditures because the real-balance effect will be stronger than the indirect effect and the open-economy effect. D) a decrease in total planned real expenditures because of the open-economy effect and the indirect effect.
The accompanying figure shows the demand curve, marginal revenue curve, marginal cost curve and average total cost curve for a monopolist.
The socially optimal level of output is:
A. 10 units per day. B. 4 units per day. C. 5 units per day. D. 8 units per day.
A monopoly produces widgets at a marginal cost of $8 per unit and zero fixed costs. It faces an inverse demand function given by P = 38 ? Q. Suppose fixed costs rise to $200. What will happen in the market?
A. The firm continues to produce the same output and charge the same price. B. The firm will shut down immediately. C. The firm will decrease its output and lower its price. D. The firm will increase the price.
Refer to the information provided in Figure 24.1 below to answer the question(s) that follow.
Figure 24.1Refer to Figure 24.1. At equilibrium, the part of consumption that is dependent on income equals $________ billion.
A. $2,000 B. $1,500 C. $1,000 D. cannot be determined from the given information