Consider the perfectly competitive firm in the above figure. What will the firm choose to do in the short-run and why?
A) shut down because the firm incurs an economic loss
B) stay in business because the firm is making an economic profit
C) stay in business because the firm's economic loss is less than fixed costs
D) stay in business because it is making zero economic profit
C
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Exhibit 30-1
?
A. It is the quantity of output at which marginal social costs (MSC) equal marginal private costs (MPC). B. It is the quantity of output at which MPC > MSC. C. It is the market output; it is the quantity of output that exists if the external costs associated with the negative externality are not taken into account. D. It is the socially optimal output; it is the quantity of output that exists if the external costs associated with the negative externality are taken into account. E. none of the above
If there's an increase in the future marginal product of capital in a large open economy, it causes the current account to ________ and saving to ________
A) fall; rise B) rise; remain unchanged C) fall; remain unchanged D) rise; rise
Which of the following is true of the gravity model?
A. The gravity model states that the trade flows between two countries are proportional to the countries' land masses. B. The gravity model states that the trade flows between two countries are directly proportional to their gross domestic product (GDP). C. The gravity model states that trade flows between a developing and a developed nation are usually unidirectional. D. The gravity model emphasizes the role of the government to generate adequate gains from trade.
Assuming the market is in equilibrium in the graph shown with demand D and supply S2 at a quantity of 8, producer surplus is:
A. less than the consumer surplus. B. 28 C. $32. D. 16