Say 6 homogenous consumers have individual willingness to pay P = 20 - 4Q. If the marginal cost of providing Q is 6Q, the optimal amount of Q is
A. 0.
B. 2.
C. 6.
D. 4.
Answer: D
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Which of the following best describes the concept of laissez-faire?
a. Government should not intervene in the economy b. Government should actively intervene in the economy whenever it judges the action to be beneficial. c. Government should intervene in the economy only to promote short-term economic stability. d. Government should intervene in the economy only to maximize long-term growth rates. e. Government should intervene in the economy only when the economy is not at full employment or there is substantial inflation.
Assuming that all other things are equal, including the wage, which of the following statements is correct?
a. The quantity of labor supplied for difficult jobs exceeds that for easy jobs. b. The quantity of labor supplied for fun jobs exceeds that for dull jobs. c. The quantity of labor supplied for dangerous jobs exceeds that for safe jobs. d. All of the above are correct.
Suppose GDP is $10 billion, consumption expenditure is $7 billion, investment is $2 billion, and government purchases of goods and services is $2 billion. Net exports of goods and services must be
What will be an ideal response?