Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below. Acme Manufacturing: TC = 100 + 3Q. Generic Industries: TC = 500 + 3Q. Suppose that Acme and Generic face the same demand curve. If each firm produces its profit-maximizing level of output and earns a positive economic profit, then which of the following statements is true?
A. Generic will produce more output than Acme.
B. Acme and Generic will produce the same quantity, but Acme will have higher profits.
C. Acme and Generic will produce the same quantity and will have the same profits.
D. Acme will produce more output than Generic.
Answer: B
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Refer to Figure 26-7. Suppose the economy is in a recession and no policy is pursued. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to A. B) C to D. C) A to B. D) C to B. E) A to E.
Refer to Figure 9.3. If the government establishes a price ceiling of $1.00, how many pounds of berries will be sold?
A) 200 B) 300 C) 400 D) 600 E) 800
If, under a fixed exchange rate system, the dollar price of a Mexican peso is above its equilibrium level, then the
A) dollar is undervalued. B) peso is undervalued. C) dollar has appreciated. D) peso has depreciated.
Developing countries place:
A. greater emphasis on growth and less emphasis on development than developed countries. B. greater emphasis on both development and growth than developed countries. C. less emphasis on both growth and development than developed countries. D. greater emphasis on development and less emphasis on growth than developed countries.