A firm operating in a perfectly competitive industry will continue to operate if it earns zero economic profits because it is likely to be earning positive accounting profits
a. True
b. False
Indicate whether the statement is true or false
True
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On a graph of the consumption function, where the consumption function crosses the 45 degree line,
A) there is no saving and no dissaving. B) disposable income is zero. C) the maximum level of disposable income is earned. D) there are no tax payments. E) induced consumption equals zero.
Which of the following is NOT correct about a single-price monopoly?
A) Maximum profit is found where demand is the most inelastic. B) Marginal revenue is negative when demand is inelastic. C) Marginal revenue is positive when demand is elastic. D) To sell more output, the firm must lower its price. E) To maximize its profit, the firm produces so that marginal revenue equals marginal cost.
Suppose that Sandy can produce 10 economic reports or make 2 sales calls. Suppose Tim can produce 2 economic reports or make 1 sales call. Which of the following is CORRECT?
A) The opportunity cost for Sandy of producing one economics report is 1/5 of a sales call. B) The opportunity cost for Sandy of producing one sales call is 10 economics reports. C) The opportunity cost for Tim of producing one sales call is 1/2 of an economics report. D) The opportunity cost for Tim of producing one economics report is 2 sales calls.
A firm that wishes to maximize profits will continue to hire labor until the
A) real wage = MPL. B) nominal wage = MPL. C) nominal wage = the real wage. D) nominal wage = the price level.