How is a long-run average cost curve different from a short-run average cost curve? How are they related?
What will be an ideal response?
The short-run average cost curve assumes a given plant size (or some other fixed cost), whereas the long-run average cost curve assumes no fixed scale of plant. The long-run average cost curve is the lower envelope of a series of short-run average cost curves.
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How do economists view profits?
A) The firm's profit equals the sum of all payments to the 5 factors of production. B) Profits are an asset the business holds. C) Profits are guaranteed as long as a firm operates ethically. D) Profits are one of the costs paid to a factor of production.
During recessions, economics majors earn about 35 percent more than the typical college graduate
Indicate whether the statement is true or false
According to the article "Why Gold?', silver may be used as money. One problem with using silver as money is that
a. silver is too abundant. b. silver tarnishes over time. c. it is not a precious metal. d. it has a high melting point.
Consider the game tree in Figure 12.8. Compared to the dominant strategy outcome, guaranteed coordination would lead to:
A. higher profits for both stores. B. lower profits for both stores. C. higher profit only for Store A. D. higher profit only for Store B.