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
Which institution is least likely to default on a bond?
A. Local government. B. Small corporation. C. U.S. federal government. D. Large corporation.
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.