If the Short-Run Marginal Costs of Producing a Good Are

question 37

Multiple Choice

If the short-run marginal costs of producing a good are $20 for the first 400 units and $30 for each additional unit beyond 400, then in the short run, if the market price of output is $24, a profit-maximizing firm will

• A)not produce at all, since marginal costs are increasing.
• B)produce as much output as possible since there are constant returns to scale.
• C)produce up to the point where average costs equal $24.
• D)produce a level of output where marginal revenue equals marginal costs.
• E)produce exactly 400 units.

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Definitions:

Three Mountains Task

A cognitive development test used to assess a child’s ability to recognize different perspectives and viewpoints.

Perspective

A specific perspective or manner of looking at something; an outlook.

Egocentrism

In developmental psychology, it refers to the inability of children in the preoperational stage to see any point of view other than their own.

Cognitive Flexibility

The mental ability to switch between thinking about two different concepts, or to think about multiple concepts simultaneously.