You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 96 ? 15Q, where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 6Q1 and MC2 = 3Q2. How much output should be produced in plant 2 in order to maximize profits?
A. 4
B. 1
C. 2
D. 3
Answer: C
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A firm will continue to produce in the short run even though economic profits are negative as long as
A) the amount of the loss is no greater than the amount of fixed cost. B) MC = MR. C) it earned positive economic profits last year. D) it has fixed obligations to pay.
As the price of movie tickets increases, which of the following is most likely to happen?
a. The demand for DVDs will increase. b. The quantity of books demanded will decrease. c. The number of Broadway tickets purchased will decrease. d. The prices of popcorn and soda will increase. e. The number of movies being produced will decrease.
Suppose that a country increased its saving rate. In the long run it would have
a. higher productivity, and another unit of capital would increase output by more than before. b. higher productivity, but another unit of capital would increase output by less than before. c. lower productivity, and another unit of capital would increase output by more than before. d. lower productivity, but another unit of capital would increase output by less than before.
A market in which the money of one nation is exchanged for the money of another nation is a:
A. resource market. B. bond market. C. stock market. D. foreign exchange market.