A firm in competitive price-taker market is maximizing profit at Q = 3,000 . Then its fixed cost increases. The profit-maximizing output is now
a. greater than 3,000 and profit decreases
b. less than 3,000 and profit decreases
c. greater than 3,000 and profit is unchanged
d. equal to 3,000 and profit decreases
e. equal to 3,000 and profit increases
D
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In the traditional Keynesian model, if the government increases government spending,
A) the C + I + G + X line will shift up but the aggregate demand curve will not shift. B) the C + I + G + X line will shift down but the aggregate demand curve will not shift. C) the C + I + G + X line will shift up and the aggregate demand curve will shift to the right. D) the C + I + G + X line will shift down and the aggregate demand curve will shift to the left.
Consider a firm that is competitive in both the product and the resource market. The firm incurs a marginal cost of $5. If the marginal product of an additional worker is 20 units, what is the maximum wage that should be offered to the worker?
What will be an ideal response?