If price exceeds average total cost
a. the firm earns an economic profit
b. there are a large number of buyers and sellers
c. the firm suffers an economic loss
d. the firm closes down
e. the firm should reduce its production
A
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Someone who values a lottery at more than the expected value is
a. a risk lover b. risk neutral c. risk averse d. one who tends to play lots of lotteries
An example of an intermediate good would be:
A. the rice used to make Chex cereal. B. a bag of Uncle Ben's rice sold to consumers. C. a bag of Quaker's rice cakes sold to consumers. D. All of these are intermediate goods
If the seller knows more about the good than the buyer knows, there exists:
A. an externality. B. asymmetric information. C. moral hazard. D. a public goods problem.
A firm combines two resources, A and B, to produce an output Q. Their respective marginal revenue products are $30 and $21. A costs $15 a unit and B $7 a unit. To reduce the cost of Q:
A. More B and less A should be used B. More A and less B should be used C. More of both resources should be used D. Less of both resources should be used