A monopolistically competitive firm will increase its production if
a. marginal revenue is greater than average total cost.
b. price is greater than average total cost.
c. price is greater than marginal cost.
d. marginal revenue is greater than marginal cost.
Ans: a. marginal revenue is greater than average total cost.
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After its reforms in the late 1970s, China followed a policy of
a. Nationalization of all enterprises b. export of technology c. free economic zones d. import substitution e. industrial planning
If a firm perceived that the other firm in an implicit pricing agreement dropped its price in response to a change in market conditions, then its most likely response would be to:
A. match the other firm's price. B. engage in a price war. C. raise price to punish the other firm. D. keep its price the same.
Federal government expenditures, as a percentage of GDP,
A) rose from 1950 to 1991, fell from 1992 to 2001, and have risen from 2001 to the present. B) rose from 1950 to 1980, fell from 1981 to 2001, and have risen from 2001 to the present. C) have fallen since the early 1950s to the present. D) rose from 1950 to 2001 and then fell from 2001 to the present. E) have risen since the early 1950s to the present.
Assume a firm employs 10 workers and pays each $15 per hour. Further assume that the MP of the 10th worker is 5 units of output and that the price of the output is $4. According to economic theory, in the short run
A) the firm should hire additional workers. B) the firm should reduce the number of workers employed. C) the firm should continue to employ 10 workers. D) More information is required to answer this question.