In the short run, a firm will
A) not produce if its total revenue does not cover its total cost.
B) produce and incur an economic loss if its total revenue covers its total variable cost but not its total cost.
C) produce and break even if its total revenue covers its total fixed cost but not its total variable cost.
D) produce and earn an economic profit if its total revenue is equal to its total cost.
B
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If average annual tuition at public 4-year colleges was $1,908 in 1990, when the CPI was 130.7, and $8,655 in 2012 when the CPI was 229.6, then the real cost of annual tuition
A) rose by 354 percent during that period. B) fell by 158 percent during that period. C) fell by 354 percent during that period. D) rose by 75.7 percent during that period. E) rose by 158 percent during that period.
Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points
A) 0.1 to 0.2 B) 0.2 to 2.0 C) 0.4 D) 0.5 to 1.0 E) 1.0 to 3.0
__________________ —a term referring to the activities that businesses can perform to take advantage of economies of scale.
a. Scarcity b. Division of labor c. Core competency d. Specialization
Answer the following statements true (T) or false (F)
1. United States has had little success with the surplus aspect of balancing the budget over the period of a business cycle. 2. The full-employment balanced budget always shows a surplus. 3. A deficit budget adds to the national debt. 4. The United States will face bankruptcy if the national debt ever reaches a figure higher than its GDP. 5. The government’s ability to repay the national debt is governed only by the total assets of the economy.