X-inefficiency is said to occur when a firm's:
A. short-run costs of producing any output are greater than the long-run costs.
B. total costs of producing any output are greater than the minimum possible average costs.
C. marginal costs of producing any output are greater than the minimum possible total costs.
D. average costs of producing any output are greater than the minimum possible average costs.
Answer: D
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Molly Sharp is producing a documentary about the plight of the six-toed ferrets of Sri Lanka. Molly has spent $125,000 of her own money on this project and the documentary is now complete
Molly just found out that no studio is willing to release her documentary and she must now shop it to cable television networks, where she knows she will not be able to recoup her investment. Which of the following statements regarding Molly Sharp's documentary is true? A) The $125,000 investment is an economic cost, and she will still make an accounting profit even if the television network willing to air her documentary pays her less than $125,000. B) She should not try to have her documentary aired on television because she cannot recoup her $125,000 investment. C) Since the $125,000 is a sunk cost, she should still try to have her documentary aired on television even though she will not see a profit. D) The $125,000 is a variable cost, so will not be incurred if she chooses not to have her documentary aired.
According to Porter's Five Competitive Forces Model, which kinds of products are most likely to limit the ability of firms in an industry to raise prices?
A) complementary products produced by different firms in the same industry B) similar products produced by similar industries in low-cost countries C) differentiated products that target a small subsegment of the industry D) substitutable products produced by firms in different industries
A central concept in macroeconomics is the idea of the natural rate of unemployment
Why does it make sense to define full employment to occur when the unemployment rate equals the natural rate of unemployment, instead of when the unemployment rate equals zero? Elaborate and explain carefully.
Suppose that the profit maximizing level of output for the monopolist is 100 units, and ATC = $45.00; MC = $35.00; MR = $35.00; P = $45.00. What is the monopoly's profit?
A) -$1000 B) $4500 C) $0 D) $3500