The production decision is a long-run supply decision.
Answer the following statement true (T) or false (F)
False
A firm's production decision is the selection of the short-run rate of output that maximizes profits.
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A plastics factory emits water pollutants into a nearby river. The marginal private cost of producing plastics and the marginal external cost of the pollutants are both constant with respect to the quantity of plastics produced
If the demand for plastics is downward sloping, what happens to the socially optimal level of output and market price if the demand curve for plastics shifts rightward? A) Optimal price and quantity increase B) Optimal price increases, optimal quantity remains unchanged C) Optimal price remains unchanged, optimal quantity increases D) Optimal price and quantity remain unchanged
Refer to the graph below. Assume the economy is at the initial position of B2. It is possible for the government to reduce the unemployment rate and move the economy to C2 if:
A. Expected inflation remains at 4%
B. Expected inflation becomes 8%
C. Actual inflation remains at 4%
D. Actual inflation is at 12%