State whether each condition is consistent with profit maximization or if production should increase or decrease.
Answer: The profit maximizing output level is that at which the marginal revenue (MR) is equal to the marginal cost (MC).
So, if MR is higher than MC so production should increase. On the other hand, if MR is less than MC then production should decline.
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In the classical theory of growth, what is the final outcome of an increase in growth and labor productivity?
What will be an ideal response?
If net foreign investment in the United States is negative, how must national saving and domestic investment be related?
A) Domestic investment can be greater than or less than national saving. B) Domestic investment and national saving must also be negative. C) Domestic investment must be less than national saving. D) Domestic investment must be greater than national saving.
An example of policies designed to encourage the development of new industries whose products can be readily exported would be
A. imposing tariffs on imports of skilled-labor-intensive goods. B. taxing exports of skilled-labor-intensive goods. C. subsidizing imports to the domestic market. D. providing subsidies to domestic industries that exploit the country's comparative advantage.
Stagflation is a term that usually describes an economy experiencing:
A. high inflation coupled with low growth. B. low unemployment rates and low inflation rates. C. low inflation. D. low inflation coupled with low growth.