Refer to the above diagram. If the production possibilities curve for an economy is at AB but the economy is operating at point 4, the reasons are most likely to be because of:
A. demand and efficiency factors.
B. technological progress.
C. supply and environmental factors.
D. labor inputs and labor productivity.
Answer: A
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Refer to the scenario above. Which of the following statements is true?
A) The discounted value of $3,400 to be received after five years is $3,000. B) Tom's return from investing in his friend's project is higher than the amount received from the bank after five years. C) Tom's return from investing in the bank is higher than the amount received from his friend's project after five years. D) The returns on both investments are likely to be similar and Tom should be indifferent about investing in either options.
If the inverse demand curve a monopoly faces is p = 100 - 2Q, then profit maximization
A) is achieved when 25 units are produced. B) is achieved by setting price equal to 25. C) is achieved only by shutting down in the short run. D) cannot be determined solely from the information provided.
When accounting profits are positive, economic profits
A) must be positive. B) will be negative. C) will equal zero. D) could be positive, negative or zero.
All of the following are true about a monopolist except:
A. Average and marginal revenues are not the same. B. Marginal revenue is greater than price. C. Marginal revenue can be negative. D. Marginal revenue decreases with increases in output.