It may be advisable for a firm to stay in business, even if it's losing money,
a. but only in the short run
b. but only if its profit covers the loss
c. but only in the long run
d. because "things may change"
e. when the owner has lots of money
A
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Which of the following statements is true?
A) Trade leads to inefficient allocation of resources. B) Trade discourages workers to specialize in production. C) International trade creates supply bottlenecks. D) Trade allows people to choose occupations that suit their talents.
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $12; AVC = $10; MC = $15; MR = $16. The firm should
A. decrease output. B. increase price. C. change nothing. D. increase output.
Essential goods give rise to corner solutions.
Answer the following statement true (T) or false (F)
Following a major natural disaster that destroys housing, a rent ceiling ________ be an effective policy to increase the quantity of more affordable housing for displaced residents because it would ________
A) would not; discourage rebuilding and result in a shortage B) would not; cause the quantity supplied to exceed the quantity demanded C) would; cause increased search activity D) would; create a black market that would result in a lower rent E) would; encourage a greater quantity supplied