"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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The rightward shift of the RS curve will lead to a ________ in the U.S. exchange rate, ________ in real GDP, and a ________ in the price level
A) rise; a decrease; fall B) rise; an increase; rise C) fall; an increase; rise D) rise; an increase; fall E) fall; an increase; fall The figure above shows the market for loanable funds. The supply of loanable funds curve shifts rightward.
Economists believe income inequality results from all the following except
a. government taxes and transfer payments b. labor market discrimination c. unequal distribution of talents in the population d. unequal access to education e. unequal distribution of lifetime accumulated assets