If a perfectly competitive seller is maximizing profit and is making zero economic profit, which of the following will this seller do?
A) go to work in the next-best earning opportunity
B) shut down, with a loss equal to total fixed cost
C) continue at the current output, making zero economic profit
D) increase production in order to make an economic profit
E) remain open but decrease production in order to make an economic profit
C
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Marginal utility can fall even as total utility from the consumption of a good is rising.
Answer the following statement true (T) or false (F)
In a perfectly contestable market in the long run, each firm
a. produces at the minimum point on its long-run average total cost curve. b. earns a profit below its opportunity cost of capital. c. avoids making capital expenditures. d. All of the above are correct.
Which of the following would be expected if the tariff on foreign-produced automobiles were increased?
A. The domestic price of automobiles would fall. B. The supply of foreign automobiles to the domestic market would decline, causing auto prices to rise. C. The number of unemployed workers in the domestic automobile industry would rise. D. The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations.
The distribution of income in a market system is a primary factor that resolves which of the following fundamental economic questions?
A. What will be produced? B. How will the output to be produced? C. How will the system accommodate change? D. Who will get the output?