Suppose a farmer is a price taker in soybeans with cost functions given by TC = .1q2 + 2q + 100 MC = .2q + 2 Suppose the farmer has to purchase a license for $50 per period in order to stay in business. In this case, its marginal cost function is
a. still MC = .2q + 2
b. MC = .2q + 50
c. MC = .2q + 52
d. MC = 50
a
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In the short run, a firm's marginal cost tends to rise as more is produced because of
a. diminishing marginal returns. b. the implicit costs of production. c. diseconomies of scale. d. rising input costs.
Changes in which of the following change the demand for capital and shifts the demand curve for capital?
A) current income B) expected future income C) the rental rate D) the marginal product of capital
Special Drawing Rights (SDRs) are issued to governments by the ________ to settle international debts and have replaced ________ in international transactions
A) Federal Reserve System; gold B) Federal Reserve System; dollars C) International Monetary Fund; gold D) International Monetary Fund; dollars
The economy is experiencing high unemployment and a low rate of economic growth and the Fed decides to pursue an expansionary money policy. Which action by the Fed would be most consistent with this policy?
a. Raising the discount rate b. Raising the reserve ratio c. Selling government securities d. Buying government securities