Max Shreck, an accountant, quit his $80,000-a-year job and bought an existing tattoo parlor from its previous owner, Sylvia Sidney. The lease has five years remaining and requires a monthly payment of $4,000
Max's explicit cost amounts to $3,000 per month more than his revenue. Should Max continue operating his business?
A) If Max's marginal revenue is greater than or equal to his marginal cost, then he should stay in business.
B) Max should continue to run the tattoo parlor until his lease runs out.
C) Max's explicit cost exceeds his total revenue. He should shut down his tattoo parlor.
D) This cannot be determined without information on his revenue.
B
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An adverse supply shock would cause the FE line to
A) shift to the right. B) shift to the left. C) remain unchanged. D) remain unchanged if the shock is temporary; shift to the right if the shock is permanent.
In terms of the aggregate demand and aggregate supply framework, the Great Depression can be viewed as a: a. rightward shift of the aggregate demand curve
b. rightward shift of the aggregate supply curve. c. downward movement along the aggregate demand curve. d. a leftward shift of the aggregate demand curve. e. a leftward shift of the aggregate supply curve.
Private costs of an economic activity exceed social cost when external benefits are created
a. True b. False Indicate whether the statement is true or false
In the Perspective on profit maximization and greed, greed is regarded as
a. inherent in capitalist societies b. an evil that must be addressed by all societies c. an expression of behavior that can be associated with all forms of profit maximization d. an acceptable mode of behavior in a zero-sum world e. having no negative consequences in a zero sum world