If MC equals MR at a point greater than ATC, the perfectly competitive firm will
a. sustain a loss.
b. shut down.
c. make an economic profit.
d. expand output.
c. make an economic profit.
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Monetary costs and opportunity costs are always identical.
Answer the following statement true (T) or false (F)
Your friend owns a snow cone stand that he works by himself. He produces about 25 snow cones per hour. He wants to be able to produce twice as many snow cones per hour so he buys a second machine
He notices that he can only produce 10 more snow cones an hour. He jokes that he could have doubled his output with the second machine if he only had four hands. Using your knowledge of the production process, explain to your friend what you think has happened when he added more capital to his production process.
The free rider problem is a situation in which
(a) effluents such as CFCs combine with ozone and decrease concentrations of that protective chemical. (b) one agent secures benefits that others pay for. (c) there are excessive subsidies given to polluting buses or other forms of mass transit. (d) perfect property rights exist.
Which of the following is true of the shape of the long-run Phillips curve? a. It is horizontal
b. It is vertical. c. It is downward sloping. d. It is upward sloping.