A firm stands to gain by operating instead of shutting down as long as ________ sufficiently covers ________.
A. operating profit; economic profit
B. total revenue; total fixed costs
C. price; average variable cost
D. price; average fixed cost
Answer: C
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The short run is best defined as:
A. a period of time sufficiently short that at least one factor of production is fixed. B. one year or less. C. the period of time between quarterly accounting reports. D. a period of time sufficiently short that all factors of production are variable.
Government stabilization policy
A. cannot influence investment spending. B. can stimulate aggregate demand and thereby induce businesses to invest, but the amount is not totally predictable. C. can stimulate aggregate demand, but investment spending will not be affected. D. can stimulate aggregate demand, but only in the long run.
A decline in the exchange rate could have been caused by which of these factors?
A) A decline in domestic output (income) B) An increase in the domestic real interest rate C) A decline in the world demand for domestic goods D) An increase in foreign output (income)
Which of the following is an argument that the incidence of corporate taxation falls entirely on consumers?
A) Corporations pass their tax burdens on to consumers by charging higher prices equal to the amount of the tax. B) Corporations pass their tax burdens on to consumers because consumers ultimately work for the corporations. C) Corporations always evade taxes so that consumers ultimately bear the tax burdens as taxpayers. D) Most taxes on consumers are collected by corporations through sales taxes.