In the short run, a firm
A. has at least one fixed factor of production.
B. can exit an industry, and all of its factors of production are variable.
C. can enter an industry where positive profits are being earned.
D. Both B and C are correct.
Answer: A
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Payments made to the owners or shareholders of a business out of sources other than current or accumulated retained earnings are known as
a. distributions b. dividend payments c. retained earnings d. salaries e. business expenses
Most real-world choices aren't about getting all of one thing or another; instead, most choices involve _________________, which includes comparing the benefits and costs of choosing a little more or a little less of a good.
A. benefit analysis B. utility C. marginal analysis D. opportunity cost
Diminishing marginal returns imply that marginal cost is rising.
Answer the following statement true (T) or false (F)
Suppose that a town has two major bottling plants. One of these bottling plants is unionized and the union has just negotiated a 7% wage increase each year for the next two years. Which of the following is most likely to occur?
A. The only effect will be that the price charged by the unionized bottling plant will increase to cover the additional costs of labor. B. The price of labor in the unionized bottling plant will increase, but there will be no changes in the price of labor in the nonunionized bottling plant. C. The price of labor will change in both the unionized and nonunionized bottling plants, but no other input markets will be affected. D. The price of labor will change in both the unionized and nonunionized bottling plants. Employment of labor and other inputs is also likely to change in both bottling plants.