If the Ford Motor Company decides to use more robots in its manufacturing plants, the company is addressing the question of
a. which goods and services should be produced with society's scarce resources
b. what production methods should be used to produce goods and services
c. how will output be allocated among the individuals in the society
d. what prices will be charged for goods and services
e. the optimal degree of central planning
B
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Assume a perfectly competitive firm is producing 300 units of output, P = $10, ATC of the 300th unit is $11, marginal cost of the 300th unit = $10, and AVC of the 300th unit = $9. Based on this information, the firm is:
A) earning an economic profit of $300. B) earning an economic profit of $600. C) incurring a loss of $300 and should shut down. D) incurring a loss of $300, but should continue to operate in the short run.
In the short run, the profit-maximizing monopolistically competitive firm will produce the rate of output at which
A) P = MC. B) MR = MC. C) P = ATC. D) MR = ATC.
When the U.S. exchange rate rises, the trade deficit will:
A. be balanced by an increase in net exports. B. remain unaffected. C. usually rise, too. D. usually fall.
Which of the following is likely to happen when the banking system of a country recuperates after a recession?
A) Interest rates will increase. B) Household consumption expenditure will fall. C) Firms will hire more workers. D) The aggregate price level will fall.