Refer to Figure 23.1. If the market price equaled $10, in the short run this firm should
A. Produce where the ATC is at a minimum.
B. Shut down.
C. Produce with an economic loss.
D. Raise the price.
Answer: C
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Which US President was in office during World War I?
a. Grover Cleveland. b. Herbert Hoover. c. Abraham Lincoln. d. Woodrow Wilson.
If the price of ice cream increases substantially (ceteris paribus), the equilibrium quantity of hot fudge sauce, a complement, is likely to:
a. increase, and the equilibrium price of hot fudge is likely to decrease. b. increase, and the equilibrium price of hot fudge is likely to increase. c. decrease, and the equilibrium price of hot fudge is likely to decrease. d. decrease, and the equilibrium price of hot fudge is likely to increase.
The strike price of an option is:
A. the market price at the time the option is exercised. B. always above the market price. C. the price at which the option holder has the right to buy or sell. D. the market price at the time the option is written.