When businesses earn zero economic profit, they have no incentive to stay in business.
Answer the following statement true (T) or false (F)
False
A firm that is making zero economic profits is covering all of its costs, including its opportunity costs-in other words, a provision for normal profit and a motive to stay in business.
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Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky, and therefore carry a higher cost than not retiring
By using all available information as they act to achieve their goals, these teachers are exemplifying the economic idea that A) people are rational. B) people respond to economic incentives. C) optimal decisions are made at the margin. D) equity is more important than efficiency.
You have a bond that pays $60 per year in coupon payments. Which of the following would result in a decrease in the price of your bond?
A) Coupon payments on newly-issued bonds rise to $75 per year. B) The likelihood that the firm issuing your bond will default on debt decreases. C) Coupon payments on newly-issued bonds fall to $40 per year. D) The price of a share of stock in the company rises.
Which of these curves is the competitive firm's short-run supply curve?
a. the average variable cost curve above marginal cost b. the average total cost curve above marginal cost c. the marginal cost curve above average variable cost d. the average fixed cost curve
The "ceteris paribus" clause in the law of supply allows which of the following factors to change?
A. the price of an input B. technology C. the number of sellers D. the price of the good supplied