The underground economy includes:
a. only illegal sources of unreported income
b. both legal and illegal sources of unreported income.
c. both legal and illegal sources of reported income.
d. payments that are reported to the government.
b
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A firm will make a profit when
A) P > AVC. B) P = MC. C) P > ATC. D) P = ATC.
Someone who values a lottery at its expected value is
a. A risk lover b. Risk neutral c. Risk averse d. most likely to play a lottery
The long run: a. is a period long enough for every input except plant size to be varied. b. is a period in which there are no fixed costs
c. is typically a period of two years. d. is all of the above.
In which of the following scenarios would a predatory pricing scheme have the greatest chance of success, all else constant?
A) The predatory price is set well below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped only over a relatively long period of time. B) The predatory price is set well below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a relatively long period of time. C) The predatory price is set just below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped in a moderate period of time. D) The predatory price is set just below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a very short period of time.