Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $625 per robot. To maximize profits, Robbie's Robots should
A. make no adjustments as they are already maximizing their profits.
B. increase their output.
C. decrease their output.
D. stop producing since it is earning a loss.
Answer: B
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The relationship between marginal revenue and elasticity is
A) when demand is elastic, marginal revenue is positive and when demand is inelastic, marginal revenue is negative. B) whenever the elasticity is positive, marginal revenue is positive. C) whenever the elasticity is negative, marginal revenue is positive. D) when demand is elastic, marginal revenue is negative and when demand is inelastic, marginal revenue is positive. E) that total revenue equals zero at the quantity for which the demand is unit elastic.
If OPEC is an effective cartel,
a. price changes are dictated by changes in demand. b. output changes are dictated by changes in demand. c. members agree on output quotas. d. all of these.
Which of the following factors is not a major cause of long-term economic growth?
a. Government-defined property rights for individuals b. A stable, fair, and predictable political environment c. Expansionary fiscal policy (i.e., lower taxes and higher government spending) d. Competitive markets e. Free movement of goods, services, capital, and labor
When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis, a rise in labor ________________________, and a rise in the technology coefficient __________________
A) shifts the production function upward; also shifts the production function upward B) moves us up along a given production function; shifts the production function upward C) shifts the production function downward; shifts the production function upward D) shifts the production function upward; moves us up along a given production function