How does a manufacturer set his or her total output to maximize profit?
(A) Set production so that total revenue plus costs is greatest.
(B) Determine the largest gap between total revenue and total cost.
(C) Determine where marginal revenue and profit are the same.
(D) Set production at the point where marginal revenue is smallest.
Ans: (B) Determine the largest gap between total revenue and total cost.
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When the aggregate supply curve intersects the aggregate demand curve at a level of real GDP that exceeds potential GDP, is there an inflationary gap or a deflationary gap? What adjustments will take place?
What will be an ideal response?
When is a buyer NOT willing to spend a lot of time and energy researching the market?
a) when buying a large quantity of goods b) when there are many identical products available c) when the savings to be made are small d) when prices vary but quality is the same