A firm would find it profitable to increase its production when
a. its marginal revenue exceeds its marginal cost.
b. its fixed costs decrease.
c. higher resource costs raise its marginal costs.
d. new competitors reduce the demand for the firm's product.
a. its marginal revenue exceeds its marginal cost.
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There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y
These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is 150 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are A) PX = 80, PY = 130 B) PX = 40, PY = 65 C) PX = 60, PY = 120 D) PX = 30, PY = 80
An inefficient manufacturing base is likely to result when:
a. only those goods are produced in which the domestic economy has a comparative advantage. b. a newly developing economy has no international trade controls. c. competitive foreign imports are restricted. d. the economy produces only those goods in which it has technical expertise. e. producers compete solely on the basis of low cost.
A Lorenz curve based on the percentage of wealth held by different quintiles of the population, when compared to one based on income shares, shows a
a. lower degree of inequality b. higher degree of inequality c. similar degree of inequality d. higher absolute level of poverty e. lower absolute level of poverty
The price index was 120 in 2006 and 127.2 in 2007. What was the inflation rate?
a. 5.7 percent b. 6.0 percent c. 7.2 percent d. 27.2 percent