Refer to the diagram. Marginal utility:
A. increases at an increasing rate.
B. becomes negative after consuming 4 units of output.
C. is found by dividing total utility by the number of units purchased.
D. cannot be calculated from the total utility information.
B. becomes negative after consuming 4 units of output.
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Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year. Homer's earns $12,000 in revenue from the sale of those donuts. Homer's has two costs
First he pays $16,000 in annual rental payments for its five-year lease on its store. Second Homer incurs an additional cost of $5,000 for ingredients. Should Homer's shut down in the short run? A) Yes, because he is incurring an economic loss. B) Yes, because he cannot cover all of his fixed costs. C) No, because is making positive economic profit. D) No, because he can cover all of his variable costs.
What reason do economists believe that megabanks are forming?
A) Megabanks enable economies of scale in information processing which allows them to better serve their customers. B) Megabanks create economies of scale which allow the banks to make riskier investment and increase profits. C) Megabanks can compensate for their economies of scale by diversifying into many countries. D) Megabanks allow investors more opportunities and have continued to grow by using their economies of scale to overwhelm their competition.