If a firm in a perfectly competitive market is producing at a level of output where marginal costs exceed marginal revenue, its profits:
A. must be negative.
B. will increase if it produces less.
C. are maximized.
D. cannot be determined.
Answer: B
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Fiona can iron 5 shirts or cook 2 meals in an hour. Alicia can iron 6 shirts or cook 1 meal in an hour. Which of the following statements is true?
a. Fiona's marginal cost of ironing a shirt is greater than Alicia's. b. Alicia's marginal cost of ironing a shirt is greater than Fiona's. c. Alicia's marginal cost of cooking a meal is twice that of Fiona's. d. Fiona's marginal cost of cooking a meal is twice that of Alicia's.
Whether or not policymakers should try to make our society more egalitarian is largely a matter of
a. economic efficiency. b. political philosophy. c. egalitarian principles. d. enhanced opportunity.
Aggregate income includes all of the following except:
A. transfer payments. B. interest. C. employee compensation. D. rent.
As a result of the given transactions, reserves in the banking system will:
Answer the question on the assumption that the legal reserve ratio is 20 percent. Suppose that the Fed sells $500 of government securities to commercial banks (paid for out of commercial bank reserves) and buys $500 of securities from individuals, who deposit the cash in checking accounts. A. remain unchanged. B. rise by $100. C. fall by $100. D. rise by $1,000.