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.
Answer: A
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Investments that a bank makes are known as:
A) deposits. B) liabilities. C) assets. D) capital.
Although the efficient quantity to produce of any good is located where marginal social benefit and marginal social cost are equal, there will usually be other quantities where the sum of consumer and producer surplus are greater
Indicate whether the statement is true or false
When government intervenes in the production process because external benefits exist, it typically attempts
A) to impose a tax on each unit produced. B) to shift the industry's demand curve to the left. C) to shift the industry's demand curve to the right. D) to shift the industry's supply curve to the left.
If people have adaptive expectations, the Phillips curve model implies that whenever the actual rate of inflation is higher than the expected rate of inflation: a. unemployment will exceed its natural rate
b. unemployment will be less than its natural rate. c. unemployment will increase. d. unemployment will decrease.