When a perfectly competitive firm weighs price and marginal cost and no externalities exist, it is weighing the full benefits to ________ of additional production against the full costs to ________ of that production.
A. government; government
B. society; society
C. sellers; buyers
D. buyers; sellers
Answer: B
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To think at the margin means to consider
A) how people behave in their own self-interest. B) how a small change in one variable affects another variable. C) how people will decide what to purchase. D) how nothing remains constant over time.
Explain how a single-price monopoly determines its output and price. Compare this process to how a perfectly competitive firm determines its output and price
What will be an ideal response?
A bank that wants to monitor the check payment practices of its commercial borrowers, so that moral hazard can be reduced, will require borrowers to
A) place a bank officer on their board of directors. B) place a corporate officer on the bank's board of directors. C) keep compensating balances in a checking account at the bank. D) purchase the bank's CDs.
At Tony's Car Wash, a team of four workers washes and rinses each car by hand, and one worker dries the car by hand. Which of the following is true?
a. Tony will have no principal-agent problems. b. Tony will have more principal-agent problems in washing and rinsing than in drying the cars. c. Tony will have more principal-agent problems in drying than in washing and rinsing the cars. d. Tony will be awash in severe principal-agent problems. e. Tony will have no incentive to monitor the car wash.