Refer to Figure 13-14. It is possible to lower the average cost of production by expanding output beyond Q0 to Q1. Why wouldn't a firm expand its output to Q1?
A) Demand is not sufficient for consumers to buy Q1.
B) The firm wants to maximize accounting profit rather than economic profit.
C) The firm would suffer an economic loss at Q1 while it would break even at Q0.
D) The firm's marginal revenue would be negative at Q1.
C
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"Supply" is best defined as the relationship between:
A) the current price of a good and the quantity supplied at that price. B) the price of a good or service and the quantity supplied by producers at each price during a period of time. C) the cost of producing a good and the price consumers are willing to pay for it. D) the quantity supplied and the price people are willing to pay for a good.
Perfectly competitive markets are:
A. the most common type of market in our economy. B. hard to find in a real world setting. C. made up principally by consumer goods. D. typically found in industrial sectors of our economy.
The primary difference between an import tariff and an import quota is that
a. tariffs cause prices to rise, but quotas do not b. quotas cause prices to rise, but tariffs do not c. tariffs result in a net welfare loss, but quotas do not d. quotas result in a net welfare loss, but tariffs do not e. tariff revenues go to government, but quotas benefit those with the right to sell foreign goods domestically
Since 1940 the US Government has generally had a budget:
A. surplus. B. that has been balanced C. multiplier. D. deficit.