Which of the following will NOT be true if the antitrust laws are successful?
A) Producers will earn zero economic profits in the long-run.
B) Firms will not restrict output.
C) Firms will produce the competitive output.
D) Firms will produce the quantity at which marginal cost equals marginal revenue and charge a price that is greater than marginal cost.
D
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
The ordered pair that represents the origin on a graph is
a. (1, 1). b. (0, 0). c. (-1, -1). d. ( ).
income-expenditure framework, if planned aggregate expenditures less than real gross domestic product (GDP)
What will be an ideal response?
Franco's Frozen Ice produces Italian flavored ice that is sold in the freezer section of grocery stores. Currently, Franco's does not have a fixed advertising budget and advertises in grocery stores' weekly advertising flyers and on the radio. A unit of advertising in the weekly flyers costs $2,000 and a unit of advertising on the radio costs $5,000. At their current advertising levels, the
marginal benefit of advertising in the flyer is $1,500 and the marginal benefit of advertising on the radio is $5,000. Which of the following is true? A) To maximize profits, Franco's should increase the amount of advertising in flyers. B) To maximize profits, Franco's should decrease the amount of advertising in flyers. C) To maximize profits, Franco's should decrease the amount of radio advertising. D) Franco's is currently maximizing its profits from advertising.