If a firm is producing an output level at which marginal revenue exceeds marginal cost in the short run, the firm will increase profits by reducing its output level
a. True
b. False
Indicate whether the statement is true or false
False
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Production efficiency requires that
A) the economy be producing on the PPF but the marginal cost of a good does not need to equal its marginal benefit. B) the economy be producing on the PPF and that the marginal cost of a good equals its marginal benefit. C) the marginal cost of a good equals its marginal benefit but the economy does not need to be producing on its PPF. D) the society be producing at the point of allocative efficiency. E) opportunity costs be minimized.
Choose the best statement
A) GDP equals aggregate expenditure and equals aggregate income. B) An increase in government purchases increases aggregate expenditure but does not change GDP. C) An increase in compensation of employees increases aggregate income but does not change GDP. D) GDP always equals aggregate expenditure and sometimes equals aggregate income.
Refer to Figure 7-1. Under autarky, the consumer surplus is area
A) S + V. B) S. C) R. D) R + S + V.
What is the marginal product of labor and what is the average product of labor
What will be an ideal response?