A monopolist is able to sell 5 units of output at $2.50 per unit and 6 units of output at $3.50 per unit. It will produce and sell the sixth unit if its marginal cost is:
a. $8.90.
b. $8.50.
c. $8.35.
d. $8.00.
b
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Suppose a perfectly competitive firm's production function is q = L0.2K0.6 and it takes the wage and price as given. Then the firm's long-run demand for labor as a function of K, w, and p is
A) p5((0.2/w)2(0.6/r)3). B) p5((0.2/w)4(0.6/r)5). C) p5((0.2/w)5(0.6/r)4). D) p5((0.2/w)3(0.6/r)2).
Which of the following statements about crowding out is false?
A. It is not caused by a budget surplus. B. It is caused by a budget deficit. C. It can completely offset the multiplier. D. It affects interest rates and not economic growth.
Suppose total benefits and total costs are given by B(Y) = 220Y ? 15Y2 and C(Y) = 10Y. What level of Y will yield the maximum net benefits?
A. 5 B. 10/9 C. 7 D. 150/20
Game theory is especially useful for analysis in the following markets:
A. monopolistic competition B. monopoly C. perfect competition D. oligopoly