A firm whose production process exhibits constant returns to scale would find that if it doubled all of its inputs, its output would ________.
A. double
B. less than double
C. more than double
D. remain constant
Answer: A
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By adding internal costs to external costs, we determine the total
A. social cost. B. private cost. C. opportunity cost. D. accountint cost.
The principal danger to Japan in 2001 when the yen was appreciating was that this would
A. increase aggregate demand and make inflation worse. B. decrease aggregate demand and make the recession worse. C. decrease aggregate demand and make inflation worse. D. increase aggregate demand and make the recession worse.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. If John decides to expand based on expected value, it means that:
A. the difference in expected earnings from expanding versus not must exceed $150,000. B. the sum of expected earnings from expanding and from not must exceed $150,000. C. the difference in expected earnings from expanding versus not must not exceed $150,000. D. his expected earnings from expansion must exceed $150,000.
Which statement is true?
A. Price is calculated by dividing output by total revenue. B. The lowest point on the short-run supply curve is at the break-even point. C. When price exceeds marginal cost, a profit-maximizing firm will decrease production. D. The marginal cost curve intersects the average total cost curve at the break-even point.