Suppose a perfectly competitive firm is producing 77 units of output, and the marginal cost of the 77th unit is 11. If the firm can sell each unit of output for $8 and the firm's revenue is sufficient to cover its variable cost, the firm should:
A. decrease production.
B. lower its price.
C. increase production.
D. raise its price.
Answer: A
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a. The cost of hiring a fishing crew. b. The monthly loan payment on the boat. c. The supply of nets, hooks, and fishing lines. d. The fuel costs of running the boat.
Which of the following is a normative question?
A. Should the government require cars to be fuel efficient? B. Does legalized abortion lead to lower crime rates? C. Will moving a plant overseas reduce production costs? D. Will an increase in the minimum wage reduce poverty?
The majority of economists feel that ______.
a. the central bank should follow political business cycles b. the central bank should support the wishes of the incumbent party c. fiscal policy should take the lead role in stabilization d. monetary policy should take the lead role in stabilization
A rise in short-term interest rates that is believed to be only temporary
A) is likely to have a significant effect on long-term interest rates. B) will have a bigger impact on long-term interest rates than if the rise in short-term rates had been permanent. C) is likely to have only a small impact on long-term interest rates. D) cannot possibly affect long-term interest rates.