Suppose a perfectly competitive firm can produce 20,000 bushels of corn a year at an output at which marginal cost equals marginal revenue. The market price of corn per bushel is $1.00
The firm's total costs per year are $50,000 and fixed costs per year are $25,000. In the short run, this firm should A) shut down.
B) continue producing until the price of corn increases.
C) produce 20,000 bushels of corn because, although they are losing money, they are losing less than if they shut down.
D) produce 40,000 bushels to try to increase economic profit.
A
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In the figure above, the shift in the aggregate demand curve from AD1 to AD2 could be result of
A) an increase in government expenditures on goods and services. B) a decrease in the quantity of money. C) a rise in the price level. D) a fall in the price level. E) an increase in taxes.
Higher education creates
a. side payments b. negative externalities c. a wedge between marginal social cost and marginal private cost d. positive externalities e. economic efficiency
Among possible union strategies, the one that can both raise wages and add to employment is
A. restricting the supply of workers. B. raising the demand curve for the product or for labor. C. fixing the wage. D. striking frequently.
Suppose that Gigantic Company is increasing in size. As Gigantic Company grows, coordination of work teams is becoming more difficult because of increased bureaucracy. It is likely that continued growth will result in:
A. economies of scale. B. Gigantic Company achieving the minimum efficient scale of production. C. diseconomies of scale. D. increasing marginal returns.