The addition to a business firm's total costs, that comes from producing one more unit of output, is its:
a. total variable cost.
b. marginal cost.
c. sunk cost.
d. opportunity cost.
e. total fixed cost
QUESTION 2Perfectly competitive markets are characterized by:
a. rivalry in product design.
b. competition in terms of product quality.
c. attempts by sellers to outdo one another with good service.
d. none of the above.
QUESTION 3An imposition of tax by the government for funding welfare programs raises the cost of labor to firms as:
a. the demand for labor increases.
b. the demand for labor decreases.
c. the supply of labor decreases.
d. the supply of labor increases.
e. the opportunity cost of leisure increases.
QUESTION 4At a given demand, if the supply of a commodity declines, the equilibrium price level falls.
Indicate whether the statement is true or false
QUESTION 5A producer can raise profit by expanding output if his:
a. marginal revenue is equal to marginal cost.
b. marginal revenue is less than marginal cost.
c. marginal revenue is negative.
d. marginal cost is negative.
e. marginal revenue is greater than marginal cost.
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