"By producing at an output rate at which marginal revenue equals marginal cost, a firm is definitely making positive economic profits." Do you agree or disagree? Why?
What will be an ideal response?
When it produces at an output rate at which marginal revenue equals marginal cost, the firm is doing its best (providing price exceeds its average variable cost). However, the firm does not necessarily make a profit. Depending on the market conditions that affect the market price and its average variable cost, it may actually incur a loss but the loss is still the minimum as long as marginal revenue equals marginal cost.
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The World Bank's view of the effectiveness of industrial policies in East Asia is that, in general, they
A) hindered growth. B) had little or no effect on growth. C) encouraged growth. D) are the main factor in the success of the East Asian economies.
Keynes called money people hold to make routine day-to-day purchases the:
A. transactions demand for holding money. B. precautionary demand for holding money. C. speculative demand for holding money. D. store of value demand for holding money.