A firm in a perfectly competitive market maximizes profits when it finds
A) the price at which total revenue minus total cost is the greatest.
B) the quantity at which total revenue minus total cost is the greatest.
C) the quantity at which total revenue equals total cost.
D) the quantity at which total revenue is maximized.
Answer: B
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If a tripling of price triples the quantity of a good supplied, the price elasticity of supply is
a. 3 b. 300 c. 1 d. -1 e. -3
A decrease in the interest rate, other things being equal, causes a (an):
a. leftward shift of the demand curve for money. b. rightward shift of the demand curve for money. c. downward movement along the demand curve for money. d. upward movement along the demand curve for money.
Social demand is equal to
A. Public demand plus or minus externalities. B. Private goods plus or minus externalities. C. Tax revenue plus or minus externalities. D. Market demand plus or minus externalities.
The balanced-budget multiplier works whenever the government increases spending and increases taxes by the same amount.
Answer the following statement true (T) or false (F)