If price exceeds average variable cost but is less than average total cost, a firm
A) should shut down.
B) should further differentiate its product.
C) should stay in business for a while longer until its fixed costs expire.
D) is making some profit but less than maximum profit.
C
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Why does a sports car cost more than a mountain bike?
A) because sports car manufacturers are greedier than mountain bike manufacturers B) because sports cars are priced higher in order to make them attractive as status symbols C) because more scarce resources are required to produce a sports car than to produce a mountain bike D) because mountain bike manufacturers know that their customers have relatively low incomes
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the reserves account and monetary base in the context of the Three-Sector-Model? a. The reserves account becomes more positive (or less negative) and monetary base
falls. b. The reserves account becomes more negative (or less positive) and monetary base rises. c. The reserves account and monetary base remain the same. d. The reserves account becomes more negative (or less positive) and monetary base remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Critics of advertising argue that advertising
a. creates desires that otherwise might not exist. b. enhances competition. c. benefits television viewers who enjoy TV commercials. d. All of the above are correct.
A current account surplus in the U.S. balance of payments coincides with a ______.
a. financial account deficit b. financial account surplus c. balance-of-payments deficit on the current account d. negative net balance for the balance-of-payments account