A perfectly competitive firm is producing at the quantity where marginal cost is $6 and average total cost is $4. The price of the good is $5. To maximize its profit, this firm should
A) raise its price.
B) lower its price.
C) increase its output.
D) decrease its output.
E) increase the price it charges for its product.
D
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In the balance of payments, all of the following are deficit items EXCEPT
A) imports of merchandise. B) funds placed in foreign depository institutions. C) sales of dollars to foreigners. D) tourism expenditures abroad.
Whether studying the output of the U.S. economy or how many classes a student will take, a unifying concept is that:
A. both wants and resources are unlimited, so trade-offs are unnecessary. B. wants are limited and resources are unlimited, so trade-offs are unnecessary. C. wants are unlimited and resources are scarce, so trade-offs have to be made. D. wants are limited and resources are unlimited, so trade-offs have to be made.
When the government bans a good:
A. it will only be effective if it can be easily enforced. B. it doesn't need to change the trade-offs consumers face. C. it should get approval from the community before exacting the ban to be more effective. D. the cost of breaking the ban needs to be sufficiently low in order to be effective.
Empirical studies of labor supply behavior in the United States suggest that the elasticity of labor supply is ________ and therefore most of the payroll tax in the United States is borne by workers.
A. close to zero B. negative C. unit elastic D. almost perfectly elastic