Marginal revenue is the:
A. change in product price associated with the sale of one more unit of output.
B. change in average revenue associated with the sale of one more unit of output.
C. difference between product price and average total cost.
D. change in total revenue associated with the sale of one more unit of output.
Answer: D
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If an economy is producing inefficiently, it is
A. possible to increase production of all goods simultaneously. B. possible to increase production of one good at the expense of another. C. not possible to increase production of any good. D. not possible to increase economic growth. E. possible to increase production with no effort.
When the labor market is at full employment
A) real GDP equals potential GDP. B) the price level is stable. C) the price level equals the potential price level. D) the short run aggregate supply curve is horizontal.
The firm's gain in profit from hiring another worker is
A) the marginal revenue product of the extra worker. B) the extra output of the extra worker. C) the reduction in costs from hiring another worker. D) the difference between marginal revenue product and the wage of the worker.
Lisa consumes only pizzas (P) and burritos (B). Her utility function is U = P0.5 B0.5. The price of per pizza is $10 and the price per burrito is $5. In equilibrium, Lisa consumes four pizzas
Using Lisa's utility function, calculate how many burritos she consumes.