The loss-minimizing output for the perfectly competitive firm occurs at the point at which
A) TR - MR = minimum.
B) TR - TC = maximum.
C) MR = MC.
D) TC - ATC = maximum.
C
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A subsidy to buyers has been placed on the market in the graph shown. What is the amount of the subsidy per unit of this good?
A. $22
B. $16
C. $10
D. $6
Competitive firms cannot individually affect market price because
A. There is an infinite demand for their goods. B. Their individual production is insignificant relative to the production of the industry. C. The government exercises control over the market power of competitive firms. D. Demand is perfectly inelastic for their goods.
Suppose two firms operate under a system of marketable pollution permits. If it costs Firm A $25 to reduce pollution by 1,000 units per day, and Firm B can reduce costs by $35 by increasing pollution by 1,000 units per day:
A. the firms cannot gain by trading the right to pollute. B. both firms can benefit if Firm A trades the right to pollute 1,000 units to Firm B for $30. C. both firms can benefit if Firm A trades the right to pollute 1,000 units to Firm B for $40. D. both firms can benefit if Firm B trades the right to pollute 1,000 units to Firm A for $30.
All of the following would be potential problems if developing nations around the world emphasized export promotion EXCEPT
A) industrial nations may be unable to absorb the exports of many newly industrializing nations. B) it would be much harder to emphasize exports under the WTO framework if the emphasis in exports requires some kind of subsidies. C) export growth may not add to GDP if it crowds out growth in output of goods for domestic consumption. D) current research has clearly established that there is no causal connection between exports and faster economic growth.