Darlene runs a fruit and vegetable stand in a medium-sized community where there are many such stands. Her weekly total revenue equals $2,000 . Her weekly total cost of running the stand equals $3,500, consisting of $2,500 of variable costs and $1,000 of fixed costs. An economist would likely advise Darlene to:
a. shut down as quickly as possible in order to minimize her losses
b. keep the stand open because it is generating an economic profit.
c. keep the stand open for a while longer because she is covering all of her variable costs and some of her fixed costs.
d. keep the stand open for a while longer because she is covering all of her fixed costs and some of her variable costs.
a
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If the government increases spending while holding taxes constant, we expect
A) a decrease in real saving as consumers follow suit and also increase borrowing. B) planned real investment spending by businesses to increase. C) an increase in investment spending by businesses too, as they anticipate future economic growth. D) interest rates to rise.
As the definition of products narrows (i.e., becomes more specific), the concentration ratio
A) is not valid. B) tends to decrease. C) tends to increase. D) does not change in any predictable manner.
Whether the firm produces or shuts down in the short run, fixed cost is equal to
a. average variable cost b. total cost c. sunk cost d. price e. marginal cost
An economic boom in the United States would cause the aggregate demand curve in other countries to shift outward
a. True b. False Indicate whether the statement is true or false