Survivability in a perfectly competitive world requires that
A) firms minimize average total cost.
B) firms produce new and different products.
C) firms maximize profit.
D) firms maximize revenue.
C
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Assuming a firm is selling its output in a purely competitive market, its resource demand curve can be determined by
A. multiplying total product by product price. B. dividing total revenue by marginal product. C. comparing marginal product with various possible input prices. D. multiplying marginal product by product price.
National income is the sum of
A. wages and profits. B. wages, interest, profits, and rent. C. interest and rent. D. wages, transfer payments, and tax revenues.
If you advertise and your rival advertises, you each will earn $3 million in profits. If neither of you advertises, you will each earn $7 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $10 million and the non-advertising firm will earn $1 million. If you and your rival plan to be in business for only one year, the Nash equilibrium is for your firm:
A. and your rival not to advertise. B. and your rival to advertise. C. not to advertise and your rival to advertise. D. to advertise and your rival not to advertise.
Refer to Figure 2.1. If you are producing 600 tons of agricultural products per year, what is the maximum amount of manufactured products you can produce per year?
A. 300 tons B. 500 tons C. 600 tons D. 700 tons