In economics, "investment" refers only to the creation of new capital.
Answer the following statement true (T) or false (F)
True
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Answer the following statement(s) true (T) or false (F)
1. Cost-effectiveness requires that resources are allocated such that the additional benefits to society are equal to the additional costs. 2. Assume that the marginal revenue associated with the 12th unit of output is $25 and the marginal cost is $14. As a result, the firm should produce more, because the marginal profit at that output level is greater than zero. 3. When a profit-maximizing firm increases output to Q = 50, its MR= $100 and MC = $124, meaning that total profitfalls by $24, so the firm should contract production. 4. In perfect competition, the firm faces a perfectly inelastic demand. 5. The demand faced by the perfectly competitive firm is perfectly elastic, meaning that price and marginal revenue are equal.
If the government's provision of a subsidy is too large to counteract the entire effect of a positive externality, the:
A. quantity consumed will become even lower. B. quantity consumed will become too high. C. total surplus will be maximized. D. None of these statements is true.
An economics textbook is an example of:
a. capital. b. labor. c. a natural resource. d. entrepreneurship.
The aggregate demand curve shows that, if other factors are held constant
A. higher price levels will result in higher total planned spending. B. higher price levels will result in lower interest rates. C. higher price levels will result in lower total planned spending. D. lower price levels will result in inflationary conditions.