Depreciation is the term used when plants, equipment and housing deteriorate and wear out, thus losing their original values
Indicate whether the statement is true or false
TRUE
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What are the three decisions that all firms must make?
What will be an ideal response?
Using Figure 9.1, explain what a firm would do in the short run if the market price of its product were at P4 and it produced Q4 . Is the firm earning an economic profit? Explain
What will be an ideal response?
Several producers in industry A developed an improved technology that reduces the quantity of resources used to produce a given output. Which of the following would be expected?
a. The per-unit costs of production of the firms adopting the technology would increase. b. In the short run, economic profits would be earned by the earliest firms adopting the technology. c. Product price would immediately fall to the minimum average total cost of the firms quickly adopting the technology, thus retarding the rate at which firms enter the industry. d. Producers who adopt the technology will have short-run economic losses.
Which of the following is true?
A) Most stockholders own stock because they want to run the business. B) The shareholders of a large well-established firm are guaranteed to earn a real rate of return of about seven percent in the future. C) Ownership of a corporate bond provides the bondholder with an ownership right to a fraction of the firm's future profits. D) Stock ownership makes it possible for investors to own a fractional share of a firm's future profits even if they do not participate in the operation of the firm.