Suppose the point of tangency that characterizes long-run equilibrium for a monopolistically competitive firm occurs at Q1 units of output. This level of output, Q1,
a. exceeds the level of output at which marginal revenue equals marginal cost.
b. exceeds the level of output at which marginal cost equals average total cost.
c. falls short of the level of output at which price equals marginal cost.
d. exceeds the firm's efficient scale of output.
c
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Ginger bought a phone that came with a $10 rebate. Ginger should fill out and mail in the rebate form if:
A. Ginger's surplus from purchasing the phone was less than $10. B. the opportunity cost of the time and trouble of sending in the rebate form is more than $10. C. the opportunity cost of the time and trouble of sending in the rebate form is less than $10. D. she would have bought the phone without the rebate, and so sending in the rebate form involves no opportunity cost.
Resource use is allocatively efficient
A) when marginal benefit equals marginal cost. B) whenever marginal benefit exceeds marginal cost. C) whenever marginal cost exceeds marginal benefit. D) when the maximum possible quantity is being produced.
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 4 percent, then the bank can make a maximum loan of
A) $0. B) $4 million. C) $6 million. D) $10 million.
Economists view pollution as an economic problem that arises because:
a. private enterprise always minimizes the amount of pollution produced. b. profitable firms rarely pollute. c. as the economy grows, the level of pollution declines. d. firms that pollute do not pay the full social cost of producing their output.