In the short-run for a purely competitive market, a manufacturer will stop production when:
a. the total revenue is less than total costs
b. the contribution to fixed costs is zero or less
c. the price is greater than AVC
d. operating at a loss
e. a and b
b
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If a perfectly competitive firm produces an output level at which price is less than marginal costs, then the firm should:
A. reduce output to earn greater profits or smaller losses. B. leave its output level unchanged provided it is covering its variable cost. C. expand output to earn greater profits or smaller losses. D. raise its price.
Interest is considered a(n)
A) explicit cost when the firm pays a bank to borrow money. B) implicit cost when the firm owner uses his or her own funds to buy capital. C) return to entrepreneurship if the firm owner uses her own funds to buy capital. D) form of depreciation if the cost of borrowing increases. E) Both answers A and B are true.
Using the information in the table above, net exports equals
A) $1,370 billion. B) $650 billion. C) $20 billion. D) -$70 billion.
The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?
a. the owner's knowledge of how to prepare vegetarian entrees b. the money in the owner's account at the bank from which she borrowed money c. the tables and chairs in the restaurant d. the fresh fruits, vegetables, and grains the restaurant uses to prepare its meals