A monopolistic firm will shut down if
A. P = ATC for every level of output.
B. P < AVC for every level of output.
C. P > ATC for every level of output.
D. P > AVC for every level of output.
Answer: B
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John Maynard Keynes noted that
A. we could print all the money we want and still have scarcity. B. "to secure the greatest amount of pleasure with the least possible outlay should be the aim of all economic effort." C. the general notion that scarcity is due to not having enough money is an illusion. D. we could print all the money we want and still have scarcity AND the general notion that scarcity is due to not having enough money is an illusion.
When the government steps in to help determine prices, it is called
a. price ceilings. b. price floors. c. equilibrium prices. d. price control.
Adam Smith's insight was that prices adjust to guide individual buyers and sellers to reach outcomes where, in many cases,
a. opportunity cost is minimized for buyers. b. scarcity is reduced for society. c. well-being of society is maximized. d. opportunity cost of production is maximized.
(Consider This) Which of the following best explains why total compensation for U.S. workers has increased significantly over the past several decades, but take-home pay by U.S. workers has increased by much less?
A. An increased share of total compensation has gone to provide health insurance to workers. B. The share of total compensation going to retirement accounts has increased relative to all other components of compensation. C. Total compensation is measured in current dollar terms; take-home pay is measured in inflation-adjusted dollars. D. Workers are receiving a much larger share of total compensation in the form of goods and services produced by the firms that employ them.