To be binding, a price ceiling must be set above the equilibrium price
a. True
b. False
Indicate whether the statement is true or false
False
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Adam Smith used the term commercial society to refer to a society in which
A) business interests control the political system. B) everyone identifies value with price. C) everyone lives by exchanging. D) increased income is everyone's principal life goal. E) people behave without regard for the interests of others.
Financial crises are typically ________
A) characterized by sharp declines in asset prices B) associated with increases in business failures C) accompanied by sharp economic downturns D) all of the above E) none of the above
If the market price ever drops below a firm's average variable costs at its profit-maximizing level of output the:
A. firm should shut down immediately. B. loss-minimizing quantity of output is zero. C. firm is not earning enough revenue to cover the variable costs of production. D. All of these are true.
If an employee is paid a fixed wage in a production environment where the wage is independent of output, then the employee has an incentive to:
A. shirk. B. innovate. C. search for methods to overcome random elements in production. D. maximize output.