If marginal revenue is $8 and marginal costs is $10, the firm should increase its output.
Answer the following statement true (T) or false (F)
False
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Suppose total factor productivity increases. Which of the following is incorrect?
A) Households are better off. B) Consumption goes up. C) The real wage goes down. D) Output goes up.
In a Stackelberg oligopoly
A) the leader moves first, and the follower chooses its price in the second stage of the game. B) the leader moves first, and the follower chooses its output in the second stage of the game. C) both firms act simultaneously, but one chooses price and the other output level. D) there is no Nash equilibrium.
Banks deposit funds at the central bank, because:
a. They are needed for check clearing b. They need them there in order be able to purchase government securities. c. Actually, banks do not deposit funds at the central bank. They deposit them at the Treasury. d. All the above.
Suppose two companies own adjacent oil fields. Under the two fields is a common pool of oil worth $60 million. For each well that is drilled, the company that drills the well incurs a cost of $4 million. Each company can drill up to two wells. What is the likely outcome of this game if each company pursues its own self-interest?
a. Each company drills one well and experiences a profit of $26 million. b. Each company drills one well and experiences a profit of $22 million. c. Each company drills two wells and experiences a profit of $22 million. d. One company drills two wells and experiences a profit of $32 million; the other company drills one well and experiences a profit of $16 million.