A monopolistically competitive firm finds its profit-maximizing rate of output by equating
A) the marginal revenue of advertising with the marginal cost of advertising.
B) average revenue and average total cost.
C) price and marginal cost.
D) marginal revenue and marginal cost.
Answer: D
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In a barter system individuals
A) find it impossible to specialize. B) must be entirely self-sufficient. C) find it difficult to specialize, but may be able to do so. D) will almost invariably specialize.
Based on this model, it is apparent that there is a
Use thefollowing information for any or all of Questions 16 through 18. Suppose the marginal benefits and marginal costs of tire production in the U.S. are modeled as follows, where Q is in millions: MSB = 12 – 0.4Q MPB = 12 – 0.3Q MSC = MPC = 2 + 0.1Q a. negative production externality b. positive external benefit c. consumption externality measured as MEB = – 0.1Q d. negatively sloped MEC function
In the U.S. taxes:
a. are higher as a share of GDP than in France b. rely more on sales taxes than on income taxes c. have higher shares of social security contribution than in Europe d. none of the above
A bond with no expiration date has a face value of $10,000 and pays a fixed 10% interest. If the market price of the bond rises to $11,000, the annual yield approximately equals
A. 11%. B. 10%. C. 8%. D. 9%.