Graphically, a firm's total profit equals:
a. the distance between the firm's marginal revenue and marginal cost curves.
b. the distance between the firm's demand and supply curves
c. the distance between the firm's total revenue and total cost curves.
d. the distance between the average revenue and marginal revenue curves.
c
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The use of seat belts and other automobile safety features making bicycling more hazardous can be explained by the economic concept known as
A) the principle of diminishing returns. B) the principle of voluntary exchange. C) the real-nominal principle. D) the marginal principle.
The menu cost theory states that
A) wages depend on the productivity of workers. B) economic agents quickly learn the likely responses of the Fed to changes in unemployment. C) the economy is characterized by perfect competition. D) prices are not fully flexible because it is costly for firms to change prices every time there is a demand change.