Assume a firm has the following cost and revenue characteristics at its current level of output: price=$10.00 . average variable cost=$8.00 and average fixed cost =$4.00 . This firm is
a. incurring a loss of $2.00 per unit and should shut down.
b. realizing only a normal profit.
c. realizing an economic profit of $2.00 per unit.
d. incurring a loss per unit of $2.00 . but should continue to operate in the short run.
d
You might also like to view...
Increases in capital per worker ________ because ________
A) increase real GDP; they create a movement downward along the productivity curve B) increase real GDP; they create a movement upward along the productivity curve C) increase real GDP; they shift the productivity curve upward D) increase real GDP; they shift the productivity curve downward E) may increase or decrease real GDP; the result is a movement along the productivity curve but the direction depends on other factors not given
Assume the graph shown represents the market for button-up shirts and was originally in equilibrium with D and S. What type of shock might cause a shift from D to D2?
A. The price of buttons has increased.
B. The price of ties went up.
C. The price of sweatshirts went up.
D. Income has increased.
The primary goal of supply-side economics is to
A. balance the federal budget. B. reduce the balance of payments deficit. C. reduce the money supply. D. reduce inflation and increase growth at the same time.
When the Fed buys federal government securities on the open market from commercial banks, over time, the:
A. assets of these banks fall. B. liabilities of the bank fall. C. assets of the banks rise. D. liabilities of the bank rise.