Refer to Figure 15-16. In the absence of any government regulation, the profit-maximizing owners of this firm will produce ________ units and charge a price of ________
A) Q3 units; P3 B) Q1 units; P4 C) Q2 units; P2 D) Q0 units; P0
C
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What happens to a market in equilibrium when there is an increase in supply?
a) excess supply means that producers will make less of the good b) quantity demanded will exceed quantity supplied, so the price will drop c) quantity supplied will exceed quantity demanded, so the price will drop d) undersupply means that the good will become very expensive
Assume a firm produces 500 units of a good by using two inputs, capital and labor, whose per unit prices are $10 and $4
Assume also that the marginal physical product of the last unit of capital is 30 and the marginal physical product of the last unit of labor is 10. Is this firm minimizing its costs of producing 500 units of output? A) No, because the marginal products of the two inputs are not equal. B) No, because the MRTS and the price ratio for the two inputs are not equal. C) No, because the prices of the two inputs are not equal. D) The answer cannot be determined without more information.
For legal purposes, a corporation is treated as
A. an individual. B. a nonprofit organization. C. a partnership. D. a limited partner in a partnership.
The value of the expenditure multiplier in the long run is
a. 1 b. 0 c. -1 d. equal to the MPC e. equal to the 1/MPC