If the shutdown rule, p < AVC, is the same in the short run and the long run, explain why the shutdown prices may be different
What will be an ideal response?
In the short run there are fixed costs, but in the long run all costs are variable. In the long run the average variable cost is usually higher than in the short run.
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When interest rates rise, the transactions demand for money usually
A) decreases. B) increases. C) decreases initially and then increases to the original position. D) does not change.
The above figure shows the market for steel ingots. An externality can be seen because
A) the social marginal cost exceeds the private marginal cost. B) the private marginal cost exceeds the social marginal cost. C) the optimal quantity of steel is zero. D) not enough steel gets produced by the competitive market.
What are the total profits if four units are produced? a. 40
b. 70. c. -30. d. 20.
An outside lag is the time period it takes economists to formulate a stabilization policy.
Answer the following statement true (T) or false (F)