If the price a firm charges in a perfectly competitive industry is less than average total cost:
A. the firm is earning positive economic profit.
B. the firm is earning zero economic profit.
C. the firm is earning negative economic profit.
D. it is not possible to determine anything about profits.
Answer: C
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The concept of an open economy means that
A) a nation's borders are open to flows of imports and exports. B) exports should be controlled but imports should be allowed in without restriction. C) imports and exports should be restricted. D) imports should be limited while exports should be expanded.
If you mow the lawn yourself, the lawn mowing is considered household production. If you pay Larry's Lawn Service to mow your lawn, the lawn mowing is considered
A) a leisure time activity. B) a service, that will be counted as part of GDP. C) a service, but is not counted as part of GDP because it simply replaces a service you used to perform. D) rent, and therefore is counted as part of GDP. E) underground production because it replaces the underground production of you mowing your lawn.
The total level of all planned expenditures in the economy best describes
A) aggregate supply. B) aggregate demand. C) aggregate expenditures. D) both B and C are correct.
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2015. Bartech's average variable cost function is estimated to beAVC = 10 ? 0.003Q + 0.0000005Q2Bartech expects to face fixed costs of $12,000 in 2015. What is the minimum average variable cost?
A. $6.50 B. $0 C. $5.50 D. $6.00 E. $7.00