By continuing to operate when price is greater than average variable cost but less than average total cost, a firm limits its losses to:
A) $0.
B) its total fixed costs.
C) the difference between its total fixed cost and the amount by which total revenue exceeds total variable costs.
D) its total variable costs.
C
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An additive social welfare function would
A. add the incomes of the lowest ten percent of income earners. B. subtract out the utility functions of all people who are unemployed. C. sum all individual utilities. D. maximize the utility of the person with the minimum utility.
The law of comparative advantage applies to exchange between
a. individuals. b. regions. c. nations. d. all of the above.
Compared to perfect competition, the consumer surplus in a monopoly
A) is unchanged because price and output are the same. B) is lower because price is higher and output is lower. C) is higher because price is higher and output is the same. D) is eliminated.
Initially trade between the United States and Canada is balanced. Then, if a change in the exchange rate reduces the U.S. dollar price of Canadian goods, ceteris paribus, we would expect
A. a trade surplus in Canada. B. a trade surplus in the United States. C. a trade deficit in Canada. D. a trade deficit in both countries.