Suppose a perfectly competitive firm can produce 20,000 bushels of corn a year at an output at which marginal cost equals marginal revenue. The market price of corn per bushel is $2.00. The firm's total costs per year are $50,000 and fixed costs per year
are $25,000. In the short run, this firm should
A) shut down.
B) continue producing until the price of corn increases.
C) produce 20,000 bushels of corn because, although they are losing money, they are losing less than if they shut down.
D) produce 40,000 bushels to try to increase economic profit.
Answer: C
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Use the following table with data for a private open economy (no government) to answer the next question.All figures are in billions of dollars. Real GDPC + INet Exports$400$420$20450460205005002055054020600580206506202070066020If the investment in this economy is independent of income GDP, then a $10 increase in its net exports would increase its equilibrium real GDP by
A. $25. B. $200. C. $100. D. $50.
A movie monopolist sells to students and adults. The demand function for students is QdS = 600 - 100P and the demand function for adults is QdA = 1,200 - 100P. The marginal cost is $2 per ticket. Suppose the movie theater can price discriminate. What is the monopolist's profit from both students and adults?
A. $2,900 B. $2,500 C. $2,100 D. $4,900
Which of the following characterizes the largest difference between the way decisions are made in the private sector versus the public sector?
A) The incentive system for individuals to perform efficiently are vastly different. B) The workers themselves are really quite different types of people. C) In both sectors individuals will try to maximize their own individual gains over the gains of others. D) Costs and resources are vastly different in each sector.
While purchasing _____ an individual whose cost of time is low will visit a larger number of dealers compared to the individual whose cost of time is high
a. a rare piece of jewelry b. a refrigerator c. a pair of jogging shoes d. a cabinet for keeping books