Exhibit 22-2 ​ Refer to Exhibit 22-2. for the Firm That Faces the Firm

question 137

Multiple Choice

Exhibit 22-2 ​

Refer to Exhibit 22-2. For the firm that faces the demand curve in the exhibit,

• A)marginal revenue is increasing.
• B)price equals marginal revenue.
• C)if the firm maximizes profits, it produces the quantity of output at which average total cost equals marginal cost.
• D)marginal revenue equals marginal cost at all levels of output.

Recognize the importance and implications of government expenditure on public goods and services.

Evaluate the impact of taxes on consumer choices and market outcomes.

Understand the role of taxes in addressing externalities and funding public services.

Identify the sources of government revenue and the biggest expenditure programs.

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Definitions:

Cash Disbursements

Outflows of cash for expenses, including payments to suppliers, employees, and other creditors.

Manufacturing Overhead Budget

A detailed plan showing the production costs, other than direct materials and direct labor, that will be incurred over a specified time period.

Variable Selling

Refers to costs that vary directly with the level of sales, such as commissions and shipping charges.

Administrative Expense Budget

A projection of the costs associated with the general administration and management of a business.