For firms that sell one product in a perfectly competitive market, average revenue will:
A. decrease if marginal revenue is greater than it.
B. increase if marginal revenue is greater than it.
C. always be the same as marginal revenue.
D. always be greater than average total cost.
Answer: C
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A savings and loan strives for a 6% real return on its loans and estimates a 7% annual rate of inflation. It should therefore charge its borrowers a nominal interest rate of
A) 13%. B) 7%. C) 6%. D) 1.17%. E) 1%.
Borrowers benefit and lenders lose when the
A) actual interest rate is less than the expected real interest rate. B) actual interest rate is greater than the expected real interest rate. C) actual interest rate is equal to the expected real interest rate. D) actual inflation rate is less than the expected inflation rate.
According to Scenario 4-1, country A has net exports of:
a. $18 million. b. $8 million. c. $13 million. d. $9 million. e. $6 million.
One of the reasons why firms pollute air and water is that
a. air and water are often not priced. b. managers desire to pollute. c. air and water have no value to society. d. managers are profit maximizers.