The reason economists assume that firms try to maximize economic profit is
a. over time, firms that don't earn profits will have difficulty securing financing to survive
b. firms in the real world always maximize profit
c. profit is easier to calculate than revenues
d. if a firm fails to earn a profit in its first year, it will go out of business
e. profit maximization is easier for firms than revenue maximization
A
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For a firm producing in a perfectly competitive product market, the marginal revenue product of labor eventually
a. falls due to diminishing marginal returns to labor b. rises due to diminishing marginal returns to labor c. falls due to a falling product price d. falls due to a rising product price e. rises due to falling marginal productivity of labor
As Americans have become more health conscious, rules about food labels have become more complex and stringent. This is an example of government acting as
a. regulator. b. redistributor. c. taxer. d. defender. e. referee.