In the above figure, at any price between $8 per unit to $12 per unit, how many units will a profit-maximizing perfectly competitive firm produce?
A) None, because the producer will never choose to operate at a loss.
B) Less than 20 because this will reduce marginal cost.
C) Between 20 and 30, because variable costs are covered so the firm's losses will be minimized by producing rather than shutting down.
D) More than 30, because variable costs are covered so that the producer can earn economic profits.
C
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Assuming convex producer choice sets, the (marginal) technical rate of substitution is equal (in absolute value) to the ratio of input prices at any profit maximizing production plan.
Answer the following statement true (T) or false (F)
Refer to Figure 7-5. The efficient quantity of medical services is
A) 400. B) 800. C) 1,200. D) > 1,200.
Which of the following is NOT a financial institution?
A) a life insurance company B) a pension fund C) a credit union D) a business college
In the probit model Pr(Y = 1|X1, X2,..., Xk) = ?(?0 + ?1X1 + ?2X2 + ... + ?kXk),
A) the ?'s do not have a simple interpretation. B) the slopes tell you the effect of a unit increase in X on the probability of Y. C) ?0 cannot be negative since probabilities have to lie between 0 and 1. D) ?0 is the probability of observing Y when all X's are 0