Suppose you are deciding whether or not to increase production. You are making a loss with many competitors. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to $9.50, and your average fixed costs will decrease. Finally, the price you are able to charge will be $9.75. You should
A. increase production by exactly 1 unit.
B. increase production by at least 1 unit.
C. leave production unchanged because profit is maximized where you are.
D. shut down.
Answer: D
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You are considering playing a card game. The rules of the game are such that you pick a card from a standard deck of 52 cards and if the card is a diamond, you win $30 . The catch is, you have to pay the dealer a fee of $10 to play the game
What is the expected value of this gamble? (Hint: In a standard deck of cards, ΒΌ of the cards are diamonds).
In which case will the transition from short run to long run involve the shortest chronological time?
a. a service that provides temporary secretaries to companies b. an automobile factory c. a farm d. an electric utility
A sign that Country A is under pressure to appreciate its currency is its:
a. Overall balance is in surplus. b. Financial account is in surplus. c. Overall balance is in deficit. d. Reserves account is in surplus (i.e., positive). e. All of the above.
Which institution is least likely to default on a bond?
A. Local government. B. Small corporation. C. U.S. federal government. D. Large corporation.