Under conditions of perfect competition, an individual producer
a. always maximizes output.
b. operates where MR equals MC.
c. never suffers a loss.
d. operates where MR is greater than MC.
b. operates where MR equals MC.
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Which of the following reflects the correct relationship between average total cost (ATC) and marginal cost (MC)?
a. When MC > ATC; ATC is falling. b. When ATC is minimum; ATC < MC. c. When MC < ATC; ATC is falling. d. When MC < ATC; ATC is constant. e. When ATC < MC; MC is falling.
A mother gives her teenage daughter two choices: spend 20 minutes cleaning her room today or spend 25 minutes cleaning her room tomorrow. The same mother gives her same daughter two additional choices: clean out the garage for 20 minutes next Tuesday or 25 minutes next Wednesday. According to economic theory,
a. if the daughter chooses to procrastinate, she is behaving irrationally. b. the daughter will likely choose to clean out her room tomorrow but clean out the garage next Tuesday. c. the daughter will likely choose to clean out her room tomorrow and clean out the garage next Wednesday. d. if the daughter chooses to procrastinate, she is exhibiting satisficing behavior.