For a perfectly competitive firm, the profit-maximizing output level occurs where marginal cost equals price.
Answer the following statement true (T) or false (F)
True
If price exceeds marginal cost, a firm can increase its profits by selling additional output. If price is less than marginal cost, a firm can increase its profits by selling less output.
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If an increase in the price of one good causes the demand curve for another good to shift to the right, then the two goods are:
A. substitutes. B. complements. C. normal. D. unrelated.
In situations where people make decisions with perfectly predictable consequences, traditional economic models cannot explain:
A. why people experience regret. B. what the rational choice should be. C. how people maximize their utility. D. how risk aversion influences decisions.
Costs that are borne solely by the individuals who incur them are
A. transaction costs. B. external costs. C. social costs. D. private costs.
If a person is going to borrow $360,000 for a home and pay it off with a constant mortgage payment every month for 30 years, what do you know about their mortgage payment (if the interest rate is positive)?
A. The payment is more than $1,000 per month. B. The payment is less than $1,000 per month. C. The payment is exactly than $1,000 per month. D. Nothing.