Exhibit 8-10 Price and cost data for a firm
Q
P
AVC
ATC
MC
0
$12
?
?
?
1
12
3
5
5
2
12
5
6
7
3
12
7.3
8
12
4
12
9.5
10
16
In Exhibit 8-10, the maximum possible total profit is:
A. $36.
B. $24.
C. $12.
D. $8.
Answer: C
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A) Large firms are better able than small firms to spend funds on research and development required to develop new products. B) Research has shown that the deadweight loss from monopolies is a small percentage of the value of production in the United States. C) Competition is very rare in the U.S. economy and few new products are produced by smaller, competitive firms. D) Large firms can afford to lobby the U.S. government in order to impose restrictions on imports and reduce the outsourcing of jobs to other countries.
A small open economy increases its desired saving. This causes the world real interest rate to ________ and the country's current account balance to ________
A) fall; fall B) remain unchanged; rise C) fall; rise D) remain unchanged; fall
When stock prices fall significantly, people may feel less wealthy and thus decide to consume less of their current flow of disposable income. In our consumption function, this can be represented by a
A) fall in (Y - T). B) rise in T. C) rise in c. D) fall in a.
What links the decisions of consumers and firms in a market?
A) the government B) prices C) coordination officials D) microeconomics