Both monopolistically competitive firms and perfectly competitive firms maximize profits
A) by producing where price equals average total cost.
B) by producing where marginal revenue equals average revenue.
C) by producing where marginal revenue equals marginal cost.
D) by producing where price equals average variable cost.
Answer: C
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Borrowing to pay for long-lived capital expenditures makes sense as
A) the benefits are received in the current year so the burden of paying for them should be spread over many years. B) the benefits are received in the current year so the burden of paying for them should be paid in the current year. C) the benefits are received over many years so the burden of paying for them should be spread over many years. D) the benefits are received over many years so the burden of paying for them should be paid in the current year.
Along a backward-bending labor supply curve, the
a. income effect always dominates the substitution effect b. substitution effect always dominates the income effect c. substitution effect is always equal to the income effect d. substitution effect dominates the income effect at high wage rates e. substitution effect dominates the income effect at low wage rates
A rising price level should shift the expenditure schedule
a. upward and decrease equilibrium real GDP. b. downward and increase equilibrium real GDP. c. downward and decrease equilibrium real GDP. d. upward and increase equilibrium real GDP.
Benefits from trade would not include
a. the ability of people and nations to specialize. b. a greater variety of goods and services becoming available. c. less competition. d. lower prices.