Which of the following statements best reflects the production decision of a profit-maximizing firm in a competitive price-taker market when price falls below the minimum of average variable cost?
a. The firm will continue to produce to attempt to pay fixed costs.
b. The firm will stop production to minimize its losses.
c. The firm will stop production as soon as it is able to pay its sunk costs.
d. The firm will continue to produce in the short run but will likely exit the market in the long run.
B
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If the GDP price index rises from 100 to 110 to 115 over three consecutive years, it can be concluded that the inflation rate is decreasing
a. True b. False Indicate whether the statement is true or false
The factor accounting for most of the earnings difference between equally educated and experienced men and women is that women
A. receive less pay for equal work. B. are segregated into low-paying occupations. C. receive comparable pay only when they do work of comparable value to the employer. D. are prohibited by law from doing certain kinds of work.
Sales taxes, property taxes, and value-added taxes are examples of indirect taxes
a. True b. False Indicate whether the statement is true or false
When Jack consumes the first bottle of water, his utility increases by 20 utils. The second bottle of water increases his utility by 18 utils, and the third bottle of water increases his utility by 15 utils. This implies that the marginal utility of the second bottle of water is _____
a. 15 utils b. 18 utils c. 20 utils d. 24 utils