Producer surplus equals total revenue minus the sum of all marginal cost
What will be an ideal response?
True. The sum of all marginal cost equals total variable cost. Total revenue minus total variable cost equals producer surplus.
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What is scarcity?
What will be an ideal response?
Other things being equal, a technological change that raises the value of marginal product of capital raises the rental rate of capital because the
A) supply curve of capital shifts leftward. B) supply curve of capital shifts rightward. C) demand curve for capital shifts rightward. D) demand curve for capital shifts leftward.
In periods when prices are falling, on average,
A) real GDP will grow as fast as nominal GDP. B) real GDP will grow slower than nominal GDP. C) real GDP will grow faster than nominal GDP. D) one cannot calculate real GDP.
Suppose you are deciding whether or not to increase production. You are currently making a profit. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to less than that, and your average fixed costs will decrease. Finally, your average revenue will increase to $12, but your increase in revenue will be $11. You should
A. increase production by at least 1 unit. B. leave production unchanged because profit is maximized where you are. C. increase production by exactly 1 unit. D. redo the math associated with decreasing production because that may result in greater profit.