A perfectly competitive firm maximizes its profit by
A) setting its price so that it exceeds the marginal revenue.
B) choosing to produce the quantity that sets MC equal to MR.
C) cutting wages.
D) manipulating demand.
B
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Which of the following is true about total factor productivity (TFP)?
A) it can be measured just like capital and labor B) it cannot be directly measured so it has to be calculated from given values of capital, labor and output C) while it cannot be measured directly, it has an exponent of 0.3 in the Cobb-Douglas production function D) while it cannot be measured directly, it has an exponent of 0.7 in the Cobb-Douglas production function E) none of the above
Interest income is
a. the largest component of national income b. interest received by individuals for providing capital to the resource market c. the most stable component of national income d. capital e. part of the expenditure approach to GDP accounting
Which of the following would be most likely if firms in a competitive price-searcher market were earning economic profit?
a. Production inefficiencies would persist until the profit was eliminated. b. Firms would decrease their rate of output in the short run, causing a decline in profitability in the market. c. New firms would enter the market, resulting in fewer sales by existing firms. d. All firms in the market would continue to produce at their current levels and continue to charge the same price.
Which of the following statements is true?
A) If a tax is imposed on a product sold by a monopolist, the monopolist will maximize its profits by producing where marginal revenue equals marginal cost. B) A monopolist will always charge the highest possible price. C) If a tax is imposed on a product sold by a monopolist, the monopolist can increase its price to pass along the entire tax to consumers. D) Because a monopolist faces no competition, the demand for its product is perfectly inelastic.