You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 120 ? 6Q, where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 2Q1 and MC2 = 4Q2. What price should be charged to maximize profits?
A. 60
B. 70
C. 66
D. 76
Answer: A
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Using the Cambridge equation, by how much does the demand for money rise at a constant real GDP of $2,000 billion when the price level rises by 10 percent from 1.00, given k = 0.25?
A) $200 billion B) $20 billion C) $550 billion D) $50 billion
For a given level of equilibrium GDP, a tight-money/easy-fiscal policy mix compared with easy-money/tight-fiscal policy mix implies a
A) lower interest rate. B) lower level of investment. C) higher level of taxation. D) lower level of government expenditures.
A perfectly competitive firm will hire workers up to the quantity at which the wage rate equals the
A) marginal revenue product of labor. B) marginal factor cost of labor. C) price of the extra output produced. D) average physical product of labor.
If consumers' expectations about future income are very optimistic, then we should expect
a. the consumption function to shift downward. b. consumers to move up along the consumption function. c. the consumption function to shift upward. d. consumers to move down along the consumption function.