Using Figure 9.1, explain what a firm would do in the short run if the market price of its product were at P3 and it produced Q3 . Is the firm earning an economic profit? Explain
What will be an ideal response?
The firm would continue to produce in the short run. The firm is enjoying a normal profit since the market price is equal to its average total cost. Normal profit is enjoyed when the firm is able to cover all its economic costs of production.
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As of 2008, the members of the WTO account for what percentage of world trade?
A) 3 percent. B) 23 percent. C) 57 percent. D) 97 percent
The decreasing portion of a firm's long run average cost curve is attributable to:
a. diminishing returns to scale. b. increasing marginal cost. c. economies of scale. d. diseconomies of scale. e. constant returns to scale.
Rent is defined as the
a. payment received for the use of an asset b. cost to an entrepreneur for using his or her own resources c. difference between what a resource receives and the cost of bringing that resource into production d. difference between the total revenue earned from selling a good and the cost of bringing the good into being e. selling value of land
Assume the nominal dollar-per-euro ($/€) exchange rate appreciates by 2%, U.S. prices rise by 5% and Euro-Area prices rise by 3%. By approximately how much does the real exchange rate change?
a. 3% b. There is no change. c. 4% d. 5% e. 6%