Which of the following conditions would definitely cause a perfectly competitive company to shut down in the short run?
A) P < MC
B) P = MC < AC
C) P < AVC
D) P = MR
C
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In 2011, the U.S. experienced
a. both current account and financial account deficits. b. a deficit in the current account and a surplus in the financial account. c. a surplus in the current account and a deficit in the financial account. d. a surplus in both the current account and the financial account.
The enormous budget deficits of 2009 through 2011 meant that the federal government was borrowing upwards of $1.5 trillion per year. If that borrowing had limited the ability of the private sector to get financial capital for its purposes, economists would call this crowding out. There was
A. significant evidence this was a problem because interest rates were very low. B. little evidence this was a problem because interest rates were very low. C. significant evidence this was a problem because interest rates were very high. D. little evidence this was a problem because interest rates were very high.
Governments grant patents to
A) compensate firms for research and development costs. B) encourage competition. C) encourage low prices. D) encourage firms to reveal secret production techniques.
Which of the following statements describes a difference between the short run and the long run?
A) The law of diminishing returns is an issue in the long run but not in the short run. B) All resources are fixed in the short run, and all resources are variable in the long run. C) Some resources are fixed in the short run, and all resources are variable in the long run. D) Variable costs are more important for decision making in the short run than in the long run.