A technically efficient method of production produces a given level of output at the lowest possible cost.
Answer the following statement true (T) or false (F)
False
Technical efficiency only implies that a given output level is produced with the fewest possible inputs. The statement above is the definition of economic efficiency.
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Use the following graph for a profit-maximizing pure monopoly to answer the next question.
The firm will produce the quantity ________.
A. 0V B. 0Y C. 0X D. 0T
Assume that each day a firm uses 13 employee-hours per day and an office to produce 100 units of output. The price of each unit output is $5, the hourly wage rate is $10, and rent on the office is $200 per day. Each day the firm earns a ________ of ________.
A. loss; $200 B. loss; $170 C. profit; $170 D. profit; $370
Use the law of diminishing utility to explain why a demand curve is typically downward-sloping.
What will be an ideal response?
Investors are often willing to take the risks associated with investing in capital goods in developing nations because developing nations
A. get the International Monetary Fund (IMF) to back investments through a series of loan guarantees. B. insure a small return on investment. C. always insure the investments. D. have a large portion of the world's unutilized or underutilized resources and hence profit potential.