Since the beginning of the millennium, the United States has witnessed closure of many Internet start-up companies. According to the model of perfect competition, these companies must have shut down in the short run because:
a. the price they were charging was too high to attract customers.
b. the price they were charging was too low to provide sufficient revenues.
c. they were not earning enough revenue to cover their total costs.
d. they were not earning enough revenue to cover their total variable costs.
e. they were not earning enough revenue to cover their total fixed costs.
d
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Producers in perfect competition receive a smaller producer surplus than a monopoly producer
Indicate whether the statement is true or false
Government spending programs that create jobs are often popular because
A) when spending programs are funded by the government there are no secondary effects. B) if a spending program is approved by Congress, it means that the value of what is produced is greater than the value of the resources used to produce it. C) the benefits of job creation are always greater than the costs. Jobs are the key to economic progress. D) the created jobs are highly visible, while the secondary effects of lost jobs in other areas, higher interest rates, and higher future taxes are less visible.
Because there is a finite supply of a nonrenewable resource,:
a. it has inadequate substitutes. b. any use of that resource today will leave less available for tomorrow. c. such resources are replenished faster than they are consumed. d. the government subsidizes the extraction of such resources. e. any use of that resource today means the value of the resource will fall in the future.
What is the short-run breakeven point of operation in a perfectly competitive market?