The marginal cost of catching a fish is the same as the average total cost at your current level of 3,000 fish. If the price you receive for fish is greater than the marginal cost of the 3,000th fish, you should
a. add another boat to your fleet
b. decrease production until MC = MR
c. increase production until MC = MR
d. stop production at 3,000th fish
e. decrease production until the marginal cost of the next unit is enough to pay for the workers, bait, and fuel
C
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When a negative externality exists in a market, total surplus:
A. is decreased by deadweight loss compared to that same market without a negative externality. B. is the same as a market without a negative externality. C. is increased by deadweight gain compared to that same market without a negative externality. D. is the same but re-distributed differently than if that same market did not have a negative externality.
A combination of a decrease in the discount rate and an increase in reserve requirements would: a. increase the money supply
b. decrease the money supply. c. leave the money supply unchanged. d. have an indeterminate effect on the money supply.
Because it has a direct effect on the hiring decisions of firms, a change in business confidence has a much larger impact on the level of economic activity than does a change in consumer confidence
Indicate whether the statement is true or false
Which of the following is included in the investment category under the expenditure approach to GDP accounting?
a. stocks b. bonds c. durable goods d. additions to business inventories