A firm that makes zero economic profits
A. Covers all its costs, including a provision for normal profit.
B. Incurs an accounting loss if fixed costs are greater than variable costs.
C. Must eventually go bankrupt and exit the industry.
D. Does not cover its variable costs and should shut down in the short run.
Answer: A
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The above figure shows the market for neckties after the government has imposed a tax. How much government revenue is generated by the tax?
A) $1,000.00 per month B) $800.00 per month C) $500.00 per month D) $400.00 per month
In the figure above, line A represents the
A) the line of market income distribution. B) line of equality. C) line of equal number of people in each household. D) line of equal consumption in each household.
The latest news report stated that the housing market is making a comeback and that house prices are on the rise. This information is likely to:
A. increase demand for houses now due to a change in expectations of future prices. B. decrease demand for houses now due to a change in expectations of future prices. C. have no effect on the current housing market, but will increase demand in the future. D. have no effect on the current demand for housing, but will decrease current supply.
An increase in unearned income always creates a disincentive to work
Indicate whether the statement is true or false