A wheat farmer sells wheat to a grain broker Chicago. Since the market for wheat is generally considered to be competitive, the wheat farmer maximizes his profit by choosing
a. to produce the quantity at which average variable cost is minimized.
b. to produce the quantity at which average fixed cost is minimized.
c. to sell its wheat at a price where marginal cost is equal to average total cost.
d. the quantity at which the farm's marginal cost of production is equal to the market price.
D
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However linked the war-induced cycle theory is to our economic reality, most economists suppose that
a. war conspiracies, seemingly far-fetched, have much validity b. these cycles were random shocks to an economy already in continuous cyclical motion c. most wars since 1815 (Napoleonic period) were initiated principally to jump-start a sagging economy d. wars are necessary to achieve sustained economic prosperity e. there is no link between war and the economy
The natural rate of unemployment is the
a. unemployment rate that would prevail with zero inflation. b. rate associated with the highest possible level of GDP. c. difference between the long-run and short-run unemployment rates. d. amount of unemployment that the economy normally experiences.