A utility-maximizing consumer will
a. consume at a point on her budget line
b. consume each good until its marginal utility is zero
c. adjust her consumption pattern so that the marginal utilities of all goods are equal
d. consume more of a good only if its price rises
e. stop consuming any good whose price rises
A
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What serves as the supply curve for a perfectly competitive firm? Why is this supply curve upward-sloping, or why does it take a higher price to get a firm to produce and sell more output?
What will be an ideal response?
When a firm is able to achieve the output indicated by a production function, it is producing with technical efficiency.
Answer the following statement true (T) or false (F)
The goal of product differentiation and advertising in monopolistic competition is to make:
A. the firm allocatively efficient even if it is not productively efficient. B. price more of a factor and product differences less of a factor in consumer purchases. C. price less of a factor and product differences more of a factor in consumer purchases. D. the firm productively efficient even if it is not allocatively efficient.
A firm seeking to maximize economic profits should produce at the output at which
A) total revenue equals total cost. B) marginal revenue equals marginal cost. C) average revenue equals average cost. D) marginal revenue equals average revenue.