A cost curve drawn with years on the horizontal axis and costs per unit on the vertical axis would be a(n)
A. analytical cost curve.
B. long-run cost curve.
C. historical cost curve.
D. theoretical cost curve.
Answer: C
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Use the following graph for a perfectly competitive firm to answer the next question.
The firm is
A. generating a loss and should shut down in the short run. B. generating a loss, but should continue to produce in the short run. C. earning a normal profit. D. earning an economic profit.
Which of the following leads to a deadweight loss? i. overproduction ii. underproduction iii. taxes iv. monopoly
A) ii only B) iii and iv C) i and ii D) i, ii, iii, and iv E) i, ii, and iii
In the above figure, if the wage rate fell below Wb, in the short run the firm would
A) hire more workers. B) fire several workers. C) reduce its level of output. D) keep all its input levels the same as they were before.
A competitive firm's short-run supply curve is perfectly elastic.
Answer the following statement true (T) or false (F)