For a perfectly competitive firm, profit maximization occurs when
A) marginal revenue equals average total cost.
B) marginal revenue equals marginal cost.
C) marginal cost is equal to average total cost.
D) average total cost is at its minimum.
B
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A) more; less B) more; more C) less; less D) less; more
A government-imposed restriction on the quantity of a specific good that another country is allowed to sell in the U.S. is
A) a regional trade bloc. B) an import quota. C) a voluntary import expansion. D) a voluntary restraint agreement.
The realization that only a small portion of criminals commit the majority of crimes suggests that, as you devote more resources to the criminal justice system, the
A. marginal benefit quickly increases. B. marginal cost sharply increases. C. total cost always decreases. D. total benefit quickly decreases.
In the above figure, if the budget line shifts from RT to RS, the substitution effect is illustrated by the move from
A) a to b. B) a to c. C) b to c. D) T to S.