If the market price ever drops below a firm's average variable costs at its profit-maximizing level of output the:
A. firm should shut down immediately.
B. loss-minimizing quantity of output is zero.
C. firm is not earning enough revenue to cover the variable costs of production.
D. All of these are true.
D. All of these are true.
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Suppose statistical surveys indicate that new orders for manufactured goods and new building permits for single-family homes are declining and that business inventories are rising. This implies economic activity is slowing down and the economy is potentially entering a recessionary period
a. True b. False Indicate whether the statement is true or false
The statement "Resources employed in producing X are better suited to making Y" is another way of saying resources
a. are specialized. b. are scarce. c. are used inefficiently. d. are unproductive. e. have no opportunity cost.
A US commercial bank can lend 100% of its total reserves
a. true b. false
Assume you and your best friend set up a partnership and your lawyer tells you that as the owners, you could each stand to lose your personal wealth if the business goes bankrupt. This means a partnership
A) faces limited liability. B) faces unlimited liability. C) has little chance of succeeding. D) is not a good type of business to set up.