A profit-maximizing monopoly will spend on a process innovation
a. up to the point where P = MC. Answer: d. up to the point where MR = MC.
b. up to the point where P = AC.
c. anywhere where MR>MC.
d. up to the point where MR = MC.
e. anywhere where MR
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The AD curve will shift to the right if:
a. people become pessimistic about the future of the economy. b. there is a decrease in foreign income. c. the government decreases spending. d. the domestic price level decreases. e. the foreign price level increases.
Figure 2-9
Which of the following statements could explain the concave shape of the production possibilities curve in ?
a.
The publishing industry develops improved printing presses.
b.
Productive efficiency increases as the publishing industry moves from point F to point H
c.
More editors and writers are employed as the publishing industry moves from point F to point H.
d.
Some writers are better suited to writing novels; some are better suited to writing textbooks.
e.
The prices of paper and ink fall as the publishing industry moves from point H to point F.
In contrast to the post–World War II period, before 1940 the government
A. actively intervened in the economy for stabilization purposes. B. used aggregate demand management to avoid recessions. C. rarely intervened in the economy to influence inflation or unemployment rates. D. used government ownership to guarantee full employment.
What name is given to the economic process of turning inputs into outputs that a business will sell to customers?
A. Revenue B. Production C. Profit maximization D. Profit