If a perfectly competitive firm has a 70 percent probability of a high demand of $5 and a 30 percent chance of a low demand of $4, what is the firm's expected marginal revenue?
A) $4.50
B) $4.70
C) $1.20
D) $3.50
B) $4.70
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How are final goods and services valued when measuring nominal GDP?
A) at producer cost B) at base year prices C) at foreign exchange parity D) at current market prices E) at factor market prices
The prices of stocks and bonds move
a. in opposite directions to the Fed's interest rate target b. in opposite directions to the spending patterns of Congress c. in similar directions to the Fed's interest rate targets d. in similar directions to the spending patterns of Congress e. whenever the Open Market Committee threatens a change in the money supply
If the nominal interest rate is 4.2 percent and the rate of inflation is -0.5 percent, then the real interest rate is
a. -8.4 percent. b. -2.1 percent. c. 3.7 percent. d. 4.7 percent.
Suppose the G8 nations decide that the dollar is too strong (high in value) relative to the yen. These nations might:
A. use official reserves of yen to buy dollars. B. use official reserves of dollars to buy yen. C. encourage Japan to print more yen. D. encourage the United States to increase interest rates.