Managers at Concord Construction have determined that the firm’s revenues do not cover the firm’s average variable costs. Which term describes the situation at Concord Construction?

a. The shutdown point
b. Allocative inefficiency
c. Diseconomies of scale
d. The price taking point


a. The shutdown point

Concord Construction has reached the shutdown point.

Economics

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Some policymakers claim that raising the minimum wage will result in economic growth. If increasing the minimum wage would actually generate economic growth, we would expect to eventually see nominal wages ________ and unemployment ________

A) rise; rise B) rise; fall C) fall; rise D) fall; fall

Economics

If the shutdown rule, p < AVC, is the same in the short run and the long run, explain why the shutdown prices may be different

What will be an ideal response?

Economics

In order to increase the confidence of investors, the new President of Montesia provides lucrative tax incentives to its investors. This will result in a(n):

a. increase in the level of planned investment spending of firms b. decrease in the level of investment spending that is financed through borrowed money. c. decrease in the level of production of firms. d. increase in the average price level of the economy.

Economics

Tax systems that impose recordkeeping requirements on taxpayers are said to have a(n)

a. auditing burden. b. lower incidence of compliance. c. administrative burden. d. certification requirement.

Economics