A profit-maximizing firm would
a. consider opportunity costs rather than accounting costs when making decisions about output.
b. expand current output if the revenues expected from doing so were less than the expected costs.
c. enlarge its current plant size if present depreciation costs were less than average variable costs.
d. increase output in the next period if accounting profits during the previous period were positive.
A
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The market's allocation of resources is
a. inefficient whenever the government intervenes b. efficient regardless of whether externalities exist c. efficient only when externalities exist d. inefficient whenever externalities are present e. dependent upon externalities
If the MPC = 0.8, and intended investment rises from $100 to $150, national income will increase by
a. $50 b. $125 c. $20 d. $250 e. $200
On a given linear demand curve, as price increases demand becomes:
A. more negative. B. more variable. C. more elastic. D. less elastic.
How does human specialization contribute towards increasing an economy's output?
A. It exploits the differences in abilities B. It is a process of creative destruction C. It pushes each worker to master the whole product D. It encourages people to be "jacks-of-all-trades"