If Microsoft is earning a rate of return greater than the return necessary for the business to continue operations in the long run, then
A. the normal rate of return is zero.
B. total costs exceed total revenue.
C. total costs exceed a normal rate of return.
D. the firm is earning an economic profit.
Answer: D
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Increases in the marginal product of labor result from
A) increasing the usage of all inputs. B) the division of labor and specialization. C) the use of new technology. D) hiring more efficient workers.
The main reason that many businesses fail when the price level is falling is that ________
A) deflation causes a decline in short-run aggregate supply B) as prices fall, businesses are unable to predict the quantity of output they will be able to sell C) the real value of the firms assets declines in proportion to the decrease in the price level D) falling prices mean that regular loan payments become increasingly difficult
One of the factors important to game theory is that firms act ______.
a. in a way to minimize damage from their competitors b. in a way to maximize the bandwagon effect c. together to achieve the same outcome as a monopolist d. together to control important inputs to their industries
The health care market is characterized by:
A. extensive negative externalities. B. significant positive externalities. C. perfect knowledge by both buyers and sellers. D. a perfectly inelastic demand.