Economists generally assume that firms attempt to maximize
A) total revenue.
B) sales.
C) marginal revenue.
D) total economic profits.
Answer: D
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If MR = MC, a monopolist should:
A. stop producing. B. maintain the same level of production. C. decrease production. D. increase production.
The economic indicator which uses a weighted-average to compute changes in the general price level is called....
a. the GPI b. the HDI c. the BLI d. the CPI
Answer the following statements true (T) or false (F)
1. Do-it-yourself activities of people are a big part of the "underground economy". 2. When businesses have to install anti-pollution equipment to clean up their wastes, they are adding to GDP. 3. GDP tends to understate economic welfare because it does not take into account increases in leisure. 4. All activities included in GDP serve to enrich society. 5. Most activities in the so-called underground economy are illegal activities involving drugs or gambling, for example.
Suppose Lily's indifference curves are defined as U = ?FS + ?FH, where FS is consumption during sunny weather and FH is consumption during a hurricane. Lily receives 64 units of food when it is sunny and 16 units of food when there is a hurricane. What is the certainty equivalent of the expected food consumption bundle if the probability of sunshine is ? = 0.5?
A. 6 B. 12 C. 25 D. 36