If firms are competitive and profit maximizing, the price of a good equals the
a. marginal cost of production.
b. fixed cost of production.
c. total cost of production.
d. average total cost of production.
a
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Marginal cost indicates how much total cost increases if one more unit is produced or how much total cost drops if production declines by one unit
a. True b. False
Suppose that the price elasticity of demand for bagels is 1.60, a 10% increase in price will decrease the quantity demanded by 6%.
Answer the following statement true (T) or false (F)
Classical macroeconomic theorists believed that if there were more workers who wanted to work than there were firms who wanted to hire them, then wages would ________.
A. not change B. rise slowly C. resist falling D. fall quickly
In the above table, the level of autonomous consumption is
A) $9,000. B) $0. C) $5,000. D) $1,000.