The main difference to an economist between "short-run" and "long-run" is that:
A. Variable costs are short-run investment decisions where as fixed costs are long-run production decisions.
B. In the short-run all resources are fixed where as in the long-run all resources are variable.
C. In the long-run all resources are variable where as in the short-run at least one resource is fixed.
D. Fixed costs are more important then variable costs in the short-run.
Answer: C. In the long-run all resources are variable where as in the short-run at least one resource is fixed.
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The gap between real GDP per person in the United States and South America has been narrowing since 1980
Indicate whether the statement is true or false
By continuing to operate when price is greater than average variable cost but less than average total cost, a firm limits its losses to:
A) $0. B) its total fixed costs. C) the difference between its total fixed cost and the amount by which total revenue exceeds total variable costs. D) its total variable costs.
A consumer's demand curve
a. shows the quantity of a good or service that individual will demand at each different price b. shows the quantity of a good or service that individual will demand at different levels of income c. is derived by equating the income and substitution effects d. slopes downward because the income effect offsets the substitution effect e. will be vertical if the income effect outweighs the substitution effect
Deadweight losses occur in markets in which
a. firms decide to downsize. b. the government imposes a tax. c. profits fall because of low consumer demand. d. equilibrium prices fall.