Suppose you are deciding whether or not to increase production. You are currently making a profit. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to less than that, and your average fixed costs will decrease. Finally, your average revenue will increase to $12, but your increase in revenue will be $14. You should
A. leave production unchanged because profit is maximized where you are.
B. increase production by at least 1 unit.
C. increase production by exactly 1 unit.
D. redo the math associated with decreasing production because that may result in greater profit.
Answer: B
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In financial markets, when a firm issues stock for the first time it is called an
A) investment portfolio option. B) initial public offering. C) initial portfolio offering. D) investment portfolio offering.
Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. One of the demand curves below represents the private demand for the vaccine and the other represents the social demand for the vaccine.
The socially optimal quantity of the vaccine is ________ doses per day.
A. 75 B. 100 C. 125 D. 50
The macroeconomic policy planner’s job is made difficult because of
A. inaccurate multiplier estimates. B. timing problems. C. disagreements over potential GDP. D. uncertain forecasts. E. All of the above are correct.
Refer to the information provided in Figure 2.3 below to answer the question(s) that follow.
Figure 2.3Refer to Figure 2.3. Assume that this society's production possibility frontier is represented by Panel C. The opportunity cost of sailboats in terms of surfboards is
A. decreasing. B. increasing. C. infinite. D. constant.