A multiplant monopolist can produce her output in either of two plants. Having sold all of her output she discovers that the marginal cost in plant 1 is $30 while the marginal cost in plant 2 is $20. To maximize profits the firm will
A) produce more output in plant 1 and less in the plant 2.
B) do nothing until it acquires more information on revenues.
C) produce less output in plant 1 and more in plant 2.
D) produce less in both plants until marginal revenue is zero.
E) shut down plant 1 and only produce at plant 2 in the future.
C
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Ceteris paribus, if bond prices rise, then
A) there is no effect on bond yields. B) bond yields will increase as well. C) bond yields will fall D) the Federal reserve must be pursuing contractionary monetary policy.
Firms that sell information products experience relatively high fixed costs but, once they have produced the first unit, can
A) sell additional units at a loss, or above cost. B) provide expensive information products to consumers. C) sell additional units at a relatively low cost per unit. D) experience short-run diseconomies of scale.
If a nation experiences weather disasters, such as tsunamis and droughts, then its:
a. Average price level and real GDP should remain constant until there is a change in Aggregate Demand. b. Average price level and real GDP should fall. c. Average price level and real GDP should rise. d. Average price level should fall, and real GDP should rise. e. Average price level should rise, and real GDP should fall.
Cash is included in m2
a. true b. false