If the price of a product is $12, its average total cost is $2 and its average variable cost is $15 at the profit-maximizing output level, in the short run the firm:
A. should expand output until MR = MC.
B. cannot cover total fixed costs.
C. experiences a loss.
D. must always shut down.
Answer: C
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Which of the following is used to explain why a consumer's willingness to buy a cell phone increases as the number of other people who own and use cell phones increases?
A) network externalities B) diminishing marginal utility C) market failure D) the income effect of a price change
For firms, dividends are not deductible. They are, however, taxed preferentially at the individual level.
A. True B. False C. Uncertain
Printing money was the main method the Union government used to finance the Civil War (1861–1865), and as a result the money supply in the North rose by a factor of 4
Indicate whether the statement is true or false
Which of the following is likely to increase the equilibrium real interest rate?
a. greater tax benefits for IRAs b. technological improvement creating profitable investment opportunities c. elimination of an investment tax credit for corporations d. an increased consumption tax