Considering this graph, which of the following scenarios would most likely happen?
a. Gunnar decides not to enter the market because it has zero economic profits.
b. Freyja decides to stay in the market because of its high potential for short-term profits.
c. Dagur decides to exit the market because of its steady losses.
d. Birta decides to enter to market because its profits are consistently high.
a. Gunnar decides not to enter the market because it has zero economic profits.
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If a conscientious manufacturer underestimates the probability of his product killing someone, the manufacturer will likely take precautions that are not cost justified
Indicate whether the statement is true or false
Since 1970, the composition of federal expenditures has:
a. been virtually unchanged, but federal spending as a share of GDP has declined substantially. b. been virtually unchanged, but federal spending as a share of GDP has increased sharply. c. shifted away from national defense and toward spending on income security. d. shifted away from income security income transfers and toward spending on national defense.
Which of the following is true if investors expect greater future profits from a company?
A. The price of the company's bonds decreases. B. The current yield on the company's bonds decreases. C. The par value of the company's bonds decreases. D. The demand for the company's bonds decreases.
Draw a diagram showing the determination of a firm's optimal capital stock, showing the relationship between the user cost of capital and the future marginal product of capital. Suppose the real interest rate declines. Show what happens to the firm's optimal capital stock. What happens to the firm's desired investment?
What will be an ideal response?