In the wake of the 2008 recession, the electronics retailer Circuit City closed its stores. If we assume this was a short-run decision, the most likely explanation for it is that the price of a typical product sold at Circuit City stores was:
A. less than the average variable cost of producing the toy.
B. less than the average total cost of producing the toy but greater than the average variable cost.
C. greater than the average total cost of producing the toy.
D. equal to the average total cost of producing the toy.
Answer: A
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In the figure above, the deadweight loss when the market is a single-price monopoly rather than perfectly competitive is the area of
A) triangle aeb. B) triangle aic. C) triangle eig. D) triangle eif.
Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs, demand curves do not slope downward for pain-relieving drugs
Indicate whether the statement is true or false
Suppose the price level increases by 5 percent and the nominal wages of workers increase by 3 percent during a particular year. This implies that the real wage has: a. declined by 2 percent
b. declined by 8 percent. c. also increased by 2 percent. d. also increased by 8 percent. e. remained constant.
Fixed investment includes all of the following except:
a. all purchases by businesses that add to their inventories b. all spending on capital goods. c. all spending on producer goods. d. all spending on goods that increase future production capabilities.