If price falls below the minimum point on the AVC curve, in the short run the firm should ________, and in the long run the firm should ________.
A. produce where MC = MR; exit the industry
B. shut down; exit the industry
C. shut down; expand
D. produce where MC = MR; expand
Answer: B
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Ordinarily the Fed lends money only to banks, but during the Great Recession of 2007-2009 the Fed extended its lender-of-last-resort role to other financial institutions. These institutions included
A) securities dealers. B) investment banks. C) high-quality corporations. D) all of the above
The average productivity of labor reaches its maximum:
a. at the point of inflection of the total product curve. b. where the slope of the total product curve is steepest. c. where the slope of the total product curve is zero. d. where marginal and average productivity are equal.
Which group within the Federal Reserve System meets to discuss changes in the economy and determine monetary policy?
a. the Board of Governors b. the FOMC c. the regional Federal Reserve Bank presidents d. the Central Bank Policy Commission
Owners of partnerships
A. report their firms' income directly on their individual income tax returns. B. must pay the corporate profits tax. C. must pay the corporate profits tax as well as report their firms' income directly on their individual income tax returns. D. are not subject to paying any taxes on their firms' income.