Suppose that when a perfectly competitive firm produces 500 units of output a day, it earns an economic loss. If the price of each unit of output is $1.50, then, in the short run, it's clear that this firm:
A. should shut down.
B. is not maximizing its profit.
C. should produce more than 500 units a day.
D. should not shut down if its total variable cost is less than $750.
Answer: D
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A) allows people to behave completely morally. B) allows people to behave completely competitively. C) allows people to make goods exchanges without concern for the true costs of their actions. D) allows people to make a wide range of negotiations.
A good has a perfectly inelastic supply and a downward sloping demand curve. Imposing a sales tax of $1 per unit on the sellers of the good
A) raises the price paid by demanders by more than $1.00. B) raises the price paid by demanders by $1.00. C) raises the price paid by demanders by less than $1.00. D) does not change the price paid by demanders.
Which of the following is an example of foreign direct investment?
A) Toyota builds an automobile plant in Ohio. B) The Bank of Japan buys dollars. C) A citizen of Japan buys stock in Microsoft. D) A citizen of Japan buys a U.S. government bond.
Age is a determinant of income because
A. age contributes to costs as medical expenses increase. B. with age typically come experience, education, and training that can increase income. C. older workers have accumulated more wealth. D. older workers have accumulated less wealth.