Which of the following would shift a firm's short-run cost curves downward?
a. an advance in technology
b. an increase in employees' wages
c. an increase in the demand for the firm's product
d. an increase in excise taxes levied on the firm's product
A
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If opportunity costs are ignored: a. all firms will show accounting profits
b. all firms will appear to incur economic losses. c. firms will still make profit-maximizing production decisions. d. firms experiencing economic losses may appear to be profitable.
The presence of large sunk costs often serves as a naturally imposed barrier to entry.
Answer the following statement true (T) or false (F)
Dan owns one of the many bakeries in New York City. Which of the following events will lead to an increase in Dan's demand for the services of bakers? (i) The price of muffins increases. (Muffins are Dan's specialty.) (ii) Dan adds three new ovens to the kitchen area to help the bakers work faster. (iii) Local bakers form a union to protect themselves from low wages
a. (i) and (ii) only b. (ii) and (iii) only c. (i) and (iii) only d. (i), (ii), and (iii)
If Bradley's Butcher Shop sells its product in a competitive market, then
a. the price of that product depends on the quantity of the product that Bradley's Butcher Shop produces and sells because the firm's demand curve is downward sloping. b. Bradley's Butcher Shop's total cost must be a constant multiple of its quantity of output. c. Bradley's Butcher Shop's total revenue must be proportional to its quantity of output. d. Bradley's Butcher Shop's total revenue must be equal to its average revenue.