Answer the following statements true (T) or false (F)
1. As long as an additional unit of output yields a marginal revenue larger than its marginal cost it will be adding to total profits of the firm.
2. If MR > MC for a competitive firm, it should reduce its level of output in order to make MR equal to MC.
3. In the short run, a competitive firm will not produce unless price is at least equal to average total costs.
4. In the short run, fixed costs are important in determining a firm's optimal level of output.
5. In pure competition, a competitive firm‘s supply curve is that section of its marginal cost curve above ATC and at any price below the average cost, the firm will produce nothing.
1. TRUE
2. FALSE
3. FALSE
4. FALSE
5. FALSE
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List the factors change demand and shift the demand curve. Tell what happens to demand and the demand curve when there is an increase in the factor
What will be an ideal response?
The most common argument for income redistribution is that
A. it provides more incentive for people to try to better themselves. B. it works-it reduces the poverty rate. C. a society as wealthy as the United States has a moral obligation to provide its members with the basic necessities of life. D. it improves efficiency in the economy.