The profit-maximizing price and quantity established by a perfectly competitive firm in the above figure are
A. Q3 units of output and a price of P3.
B. Q1 units of output and a price of P5.
C. Q4 units of output and a price of P4.
D. Q1 units of output and a price of P1.
Answer: A
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When prices are allowed to fluctuate after a crisis, such as Hurricane Katrina, the high prices
A) provide information to suppliers about where goods and services are most highly desired. B) are evidence of price gouging. C) justify government intervention. D) All of the above.
Comment on the following statement: "Diminishing returns occur when total output falls as additional units of labor are combined with fixed inputs in the production process."
What will be an ideal response?
The National Bank Act of 1863, and subsequent amendments to it
A) created a banking system of state-chartered banks. B) established the Office of the Comptroller of the Currency. C) broadened the regulatory powers of the Federal Reserve. D) created insurance on deposit accounts.
Assume that disposable income equals $1000 and the mpc equals 0.6. If total consumption equal $800, then autonomous consumption is equal to
A) $0. B) $200. C) $800. D) $1000.