If a perfectly competitive firm is operating in the short run and seeks to maximize profit, the firm should:
a. increase output whenever marginal cost is less than average total cost.
b. increase output whenever marginal revenue is less than marginal cost.
c. choose the output where per-unit profit is greatest
d. increase output whenever price exceeds marginal cost.
d
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Explain how the economy moves back to full employment from recession. Be sure to detail what happens to short-run aggregate supply, unemployment, equilibrium GDP and the price level
What will be an ideal response?
With time, which one of the following strategies would most likely result in an outward shift in the production possibilities curve of an economy?
a. passage of legislation reducing the workweek to 30 hours b. instituting a tax policy encouraging consumption at the expense of investment c. instituting a tax policy encouraging investment at the expense of consumption d. an increase in the marginal income tax rate, which would reduce the work effort of individuals