A sunk cost is a cost that has already been paid and cannot be recovered
Indicate whether the statement is true or false
TRUE
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In the short run, if a firm is suffering a loss, it should
a. always shut down to prevent further losses. b. continue to operate as long as it can recover variable cost. c. continue to operate as long as it can recover fixed cost. d. continue to operate if marginal cost is below average total cost.
If a firm operates in a imperfectly competitive market, it may be able to price its products in local currencies above world prices for their goods. This is called
A) pricing to market. B) trade war. C) trade stickiness. D) price gauging.
The Keynesian consumption function does not display consumption smoothing, because ________
A) the average propensity to consume rises with income B) the marginal propensity to consume is constant C) consumption is not affected by the real interest rate D) consumption is not affected by future income
The collapse of the Bretton Woods system of fixed exchange rates during the 1970s prompted the EC to establish its own system. It was called the:
A) Marshall Plan. B) European Currency Union (ECU). C) European Monetary System (EMS). D) lend-lease plan.