"A perfect competitor should maximize total revenues." Do you agree or disagree? Explain
What will be an ideal response?
Disagree. A perfect competitor should maximize total profits instead of total revenues. Because the firm's average revenue is constant for all output levels, its total revenues increase proportionally to its output. However, because its total costs do not increase proportionally to output. As such, there is a level of output at which total profits—the difference between total revenues and total costs—are maximized.
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In a world with two products, wheat (W) and coffee (C), nation Alpha produces wheat and nation Beta produces coffee. Nation Alpha prefers an exchange rate of 1W = 2C and nation Beta prefers an exchange rate of 1W = 1C. The exchange rate preferred by nation:
A. Alpha will prevail if world demand for coffee is great relative to its supply B. Alpha will prevail if world demand for wheat is weak relative to its supply C. Beta will prevail if world demand for coffee is great relative to its supply D. Beta will prevail if world demand for wheat is great relative to its supply
The nominal tax rate refers to the actual taxes paid as a percentage of taxable income.
Answer the following statement true (T) or false (F)