Assume a perfectly competitive firm is producing a level of output at which MR < MC. What should the firm do to maximize its profits?
A) The firm should do nothing — it wants to maximize the difference between MR and MC in order to maximize its profits.
B) The firm should decrease output.
C) The firm should increase price.
D) The firm should increase output.
B
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Which of the following is false?
A. The U.S. has had twelve recessions since January 1945. B. The U.S. has had a great deal of stagflation in the 1970s. C. The U.S. has not had a depression since the 1930s. D. The U.S. had rising inflation all throughout the 1990s.
It is generally more profitable for a firm to pay workers more than the going wage rate:
A. in sectors where skills are scarce. B. in industries in which worker motivation doesn’t really matter. C. in areas in which turnover is not very costly. D. All of these are true.
According to Franco Modigliani, the MPC for young adults
a. is relatively high because they are busy building families and careers b. is relatively low because their incomes are relatively small c. is about the same as the MPCs for middle-aged adults d. is lower than the MPCs for middle-aged adults e. will remain constant over their life-cycles
Prior to the Great Depression, classical economists believed that a recessionary downturn would be reversed by:
A. higher wages and prices. B. lower wages and prices. C. an expansionary monetary policy on the part of the Federal Reserve System. D. an increase in government spending that would stimulate aggregate demand.