Answer the next question on the basis of the following data faced by a perfectly competitive firm.OutputMarginal RevenueMarginal Cost0----1$16$102169316134161751621If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be
A. 2.
B. 3.
C. 4.
D. 5.
Answer: B
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Which of the following describes how output changes in the short run? Because of specialization and the division of labor, as more workers are hired
A) output will first decrease at an increasing rate, then increase at a decreasing rate. B) the marginal product of labor will first be negative and then will be positive. C) output will first increase at an increasing rate, then output will increase at a decreasing rate. D) the marginal product of labor will first decrease, then increase at a decreasing rate.
The hidden-cost fallacy occurs when
a. A firm considers irrelevant costs b. A firm ignores relevant costs c. A firm considers overhead or depreciation costs to make short-run decisions d. Both a and c
If the Chinese Yuan devalues against the US dollar, then
a. Both the US exporters and Chinese exporters would benefit b. The US exporters would benefit while the Chinese exporters would be hurt c. The US exporters would be hurt while the Chinese exporters would benefit d. Both the US exporters and Chinese exporters would be hurt
If inflation is higher than anticipated and benefits are not indexed, which group loses purchasing power?
a. Borrowers and lenders b. Lenders and retirees c. Borrowers and retirees d. Only borrowers e. Only lenders