Marginal Revenue is A) the increase in total revenue from selling one more unit of output. B) equal to P(1+1/ε). C) equal to P when the price elasticity of demand is infinite. D) All of the above. ANSWER D
Date: September 9th, 2020
If a market is controlled by one perfect price discriminator who is able to charge each consumer the highest price that consumer is willing to pay, the seller will produce output until the price paid by the last consumer is equal to the marginal cost of making the good. That is, the price of the […]
Date: September 9th, 2020
Why do many people choose to not read the manuals included with their new computer? A) They perceive that learning by doing decreases costs faster than learning by reading. B) They perceive that learning by doing is more enjoyable than learning by reading. C) They perceive that learning by reading is not sophisticated. D) They […]
Date: September 9th, 2020
At the current level of output, a firm’s marginal cost equals 16 and marginal revenue equals 10. The firm A) is producing the profit-maximizing amount. B) should produce more. C) should produce less. D) Not enough information. ANSWER C
Date: September 9th, 2020
Short-run costs are never equal or lower than long-run cost. Indicate whether the statement is true or false ANSWER False. Since the long-run curve “envelopes” all short-run curves there is always a level of output where short-run cost are equal to long-run cost. However, short-run cost can never be lower than long-run cost.
Date: September 9th, 2020
In the long run, the expansion path is A) horizontal. B) vertical. C) diagonal. D) Not enough information. ANSWER D
Date: September 9th, 2020
Comparing the distribution of wealth of the wealthiest 1% of the population in the United States before and after the recent Great Recession to what occurred before and after the Great Depression, A) the percentage of the wealth of the wealthiest 1% increased after the recent Great Recession, unlike what happened after the Great Depression. […]
Date: September 9th, 2020
Long-run average cost is never greater than short-run average cost because in the long run, A) capital costs equal zero. B) the firm can move to the lowest possible isocost curve. C) wages always increase over time. D) wages always decrease over time. ANSWER B
Date: September 9th, 2020
Explain why the long-run total cost curve, not the short-run total cost curve, shows the lowest cost of producing any level of output. Is there an exception? What will be an ideal response? ANSWER In the long run, all costs are variable so the firm can select the least-cost mix of all inputs to […]
Date: September 9th, 2020
“If the wage rate paid to one form of labor is twice the cost of another form of labor, the first type of labor must be twice as productive.” Comment. Indicate whether the statement is true or false ANSWER true . Firms minimize cost by setting the ratio of marginal productivity per unit cost […]
Date: September 9th, 2020
