A firm maximizes its profit at a level of output, where the additional revenue earned by selling an extra unit of the output is equal to the additional cost borne for producing that extra unit of the output
a. True
b. False
Indicate whether the statement is true or false
True
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Two key properties of indifference curves are that an indifference curve slopes
A) upward and is bowed out from the origin. B) downward and is bowed out from the origin. C) upward and is bowed in toward the origin. D) downward and is bowed in toward the origin.
Suppose a firm has a variable cost function VC = 20Q with avoidable fixed cost of $50,000. What kind of firm is this?
A. This firm is a natural monopoly because as Q rises, AC falls. B. This firm is a natural monopoly because as Q rises, AC rises. C. This firm is a natural monopoly because as Q rises, VC falls. D. This firm is a natural monopoly because as Q rises, VC rises.
If revenue from a gasoline tax is used to build and maintain public roads, the gasoline tax may be justified on the basis of
a. the benefits principle. b. the ability-to-pay principle. c. vertical equity. d. horizontal equity.
Which of the following would be most appropriate for the measurement of differences in the average standard of living of people at different points in time? Select one:
a. Nominal GDP b. Real GDP c. Nominal per capita GDP d. Real per capita GDP