The firm will shut down in the short run if
A. the price falls below its minimum AVC.
B. P = MC.
C. the market price rises unexpectedly.
D. P = ATC at its minimum.
Answer: A
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It is often argued that gas stations operate inefficiently because they have "excess capacity" in the form of more pumping stations than they would otherwise need if they were operating under conditions of perfect competition
However, can you think of any reason why a gas station franchise owner would wish to install more pumps than he knows will rarely if ever be fully utilized at any one time? Can you explain the economic logic of this "apparent" wastefulness?
The logic behind the catch-up effect is that
a. workers in countries with low incomes will work more hours than workers in countries with high incomes. b. the capital stock in rich countries deteriorates at a higher rate because it already has a lot of capital. c. new capital adds more to production in a country that doesn't have much capital than in a country that already has much capital. d. None of the above is correct.
If the market basket of goods and services that the Commerce Department uses to calculate the CPI were to decline from $30,000 in the base year to $15,000 in the current year, the current year's CPI would be
A. 300. B. 150. C. 100. D. 50. E. 0.
The more time a buyer has to purchase a product, the more ________ the buyer can find and, therefore, the more _________ the good becomes.
Fill in the blank(s) with the appropriate word(s).