Total profit is maximized when marginal profit maximized.
Answer the following statement true (T) or false (F)
False
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Which of the following best explains why airlines often cut their ticket prices at the last-minute in order to fill the remaining empty seats on their flights?
A) The Federal Aviation Administration ranks each airline based on the percentage of flights that are fully booked. These rankings affect the decisions of firms to use a particular airline to fly their employees to business meetings. B) Fixed costs in the airline industry are very large, but the marginal cost of flying one more passenger is very low. C) Airlines receive a subsidy from the government for each flight that is fully booked and departs on time. D) Cutting prices makes the airlines more popular with their customers, who may fly with the same airline in the future as the result of buying low-price tickets.
The use of data in economic models is important because
A) the model's predictive value rests on supportive evidence from real-world data. B) the models are always complex in nature. C) models must analyze every possible angle of the problem. D) social problems analyzed by economists require long streams of data.
With the self-correcting mechanism, if a negative demand shock occurs,
a. a decrease in wage rates will lead to a decrease in the price level so that the economy returns to full employment b. the price level will increase, causing equilibrium GDP to return to its original level c. the wage rate will eventually increase, restoring GDP to its full-employment level d. the price level will remain constant e. there will be no effect in the long run
In general, the IMF provides developing countries with:
A. loans and lets these countries decide how the loans will be used. B. technical advice but does not provide them with loans. C. loans, but only if the government adopts certain policies specified by the IMF in return. D. neither loans nor technical advice.