A perfectly competitive firm should continue to expand output until
a. total revenue exceeds total costs.
b. total revenue exceeds variable costs.
c. marginal revenue equals marginal costs.
d. average revenue equals variable costs.
c
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The liquidity preference theory distinguishes between ________
A) nominal and real quantities B) money and financial assets C) buying goods and earning interest income D) all of the above E) none of the above
Suppose a firm's technology is represented by the Cobb-Douglas production function F(L, K) = 5LK. The wage rate is $50 and the rental rate of capital is $10. What is the least-cost combination to produce 100 units of output?
What will be an ideal response?
Which of the following is characteristic of a firm that is a competitive price searcher?
a. The firm faces an upward-sloping demand curve. b. The firm faces an inelastic demand curve. c. The firm faces a horizontal demand curve. d. The firm produces a differentiated product.
Assume that constant returns to scale exists and that N and K both increase by 2%. Given this information, we know that
A) output (Y) will increase by 4%. B) Y will increase by 2%. C) Y will increase by less than 2%. D) Y will increase by less than 4% and more than 2%.