Suppose a perfectly competitive firm is currently selling 200 units at $5 per unit and has a marginal cost of $6. The firm can maximize profit by
a. decreasing output
b. increasing price
c. decreasing price
d. increasing output
Answer: a. decreasing output
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Use the figure below to answer the following question.
If actual production and consumption occur at Q1
A. there is deadweight loss of b + d. B. there is deadweight loss of e + d. C. economic surplus is maximized. D. consumer surplus is maximized.
At the market output and price for a good whose production causes pollution,
a. pollution is eliminated b. the marginal social cost of production exceeds the marginal social benefit of production c. the private cost of production equals the private benefit of production d. the marginal social benefit of production equals the marginal social cost of production e. too little of the good is produced
An increase in taxes will cause the consumption schedule to
a. shift upward. b. shift downward. c. remain fixed as the economy moves upward along the schedule. d. remain fixed as the economy moves downward along the schedule.
A country's economic welfare most directly depends on
A. what it can produce. B. what its citizens can consume. C. how many goods and services it exports. D. how many goods and services it imports.