The price-taker firm should discontinue production immediately if:
A. the market price exceeds the firm's average total costs.
B. the market price is less than the firm's average variable costs.
C. the market price is less than the firm's average total costs, but greater than its average variable cost.
D. its accounting statement indicates that it is suffering losses.
Answer: B
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GDP is a measure of an economy's:
A. domestic productivity. B. total output. C. domestic price level. D. level of unemployment.
The chain-weighted output index method of calculating real GDP compares
A) compares the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output. B) quantities produced in different years using prices from a year chosen as a reference period. C) quantities produced in different years with the prices that prevailed during the year in which the output was produced. D) prices at different points in time using a sample of goods that is representative of goods purchased by households.
Using a unified analytic framework to present the information in the text keeps the knowledge
A) focused on theories that have little to do with actual behavior. B) theoretical and uninteresting. C) abstract and not applicable to real life. D) from becoming obsolete.
When the wage rate rises, a worker chooses to replace some leisure hours with work hours, even if he would remain equally well off. This phenomenon is known as
a. compensating differential. b. the income effect. c. the substitution effect. d. intertemporal substitution.