The rate of production that maximizes the positive difference between total revenues and total costs is the
A) profit-maximizing rate of production.
B) rate of production at which marginal revenue equals marginal product.
C) rate of production at which marginal revenue equals average revenue.
D) rate of production at which average revenue equals average total cost.
A
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If penalties are imposed on the sellers of illegal goods or services, then the equilibrium price ________ and the equilibrium quantity ________
A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases
If consumers spend _____ of a change in their disposable income, then a tax increase of $100 would lower consumption by $70
a. 35 percent b. 100 percent c. 80 percent d. 70 percent e. 50 percent
Under certain assumptions, the actions of elected officials mimic the wishes of the median voter.
A. True B. False C. Uncertain
An individual who neither uses nor produces a commodity but sells a futures contract for the asset is:
A. hedging trying to transfer risk. B. speculating that the price of the commodity is going to fall. C. speculating that the price of the commodity is going to increase. D. using arbitrage to earn profits without taking a risk.