A firm with two plants, A and B, has the following estimated demand and marginal cost functions:Qd = 120 - 10PMCA = 4 + (1 / 5)QAMCB = 6 + (1 / 10)QBHow should the firm allocate total output between the two plants in order to maximize profit?
A. produce 20 units in plant A, 20 units in plant B
B. produce 5 units in plant A, 10 units in plant B
C. produce 15 units in plant A, 10 units in plant B
D. produce 20 units in plant A, 25 units in plant B
E. none of the above
Answer: C
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When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,
a. producer surplus increases and total surplus increases in the market for that good. b. producer surplus increases and total surplus decreases in the market for that good. c. producer surplus decreases and total surplus increases in the market for that good. d. producer surplus decreases and total surplus decreases in the market for that good.
A trade deficit means a net:
A. Inflow of payments for goods and services B. Outflow of goods and services C. Inflow of goods and services D. Excess of exports over imports