A firm decides to hire more equipment if:
a. the average revenue it earns by selling its output is equal to its average cost.
b. its total revenue is greater than the total cost of hiring the equipment.
c. the marginal revenue product of the additional unit of equipment is greater than the marginal factor cost.
d. its average revenue is greater than the average cost of hiring equipment.
e. the price of its product is greater than the average cost of production.
QUESTION 2The additional satisfaction that a consumer receives from one more unit of a good or service is known as _____.
a. marginal utility
b. total utility
c. disutility
d. profit
e. the law of diminishing marginal utility
QUESTION 3The marginal cost of a good is:
a. the difference between average total cost and average variable cost.
b. the addition to total cost from producing one more unit of output.
c. decreasing whenever average total cost is decreasing.
d. always equal to average variable cost when the firm is maximizing profit.
QUESTION 4The policy of comparable worth has been more successful in the public sector than in the private sector.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5As a consumer eats additional pieces of pizza, total utility will _____.
a. always keep increasing
b. always keep decreasing
c. keep increasing until dissatisfaction sets in
d. keep decreasing until dissatisfaction sets in
e. initially keep decreasing until it becomes zero and then increase
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