Jack is selling his sweaters for the market price of $40. His average variable costs are $50. In this situation, Jack should do which of the following?
a. Shut down and only lose his fixed cost.
b. Shut down and lose his fixed and variable cost.
c. Shut down and only lose his variable cost.
d. Keep producing and lose some of his variable cost.
a. Shut down and only lose his fixed cost.
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A monopolist always produces on the elastic portion of the demand curve
a. True b. False Indicate whether the statement is true or false
The problem with public goods is that
a) too many people are excluded from their use and must find alternatives in the private sector b) the opportunity to act as a free rider is a disincentive to pay for public goods c) they compete with private goods, driving companies out of business d) they could be provided more efficiently by private companies e) they are distributed according to willingness to pay rather than ability to pay
If 40 rupees = $1, then one rupee = _____________.
Fill in the blank(s) with the appropriate word(s).
Everything else held constant, if the federal government were to guarantee today that it will pay creditors if a corporation goes bankrupt in the future, the interest rate on corporate bonds will ________ and the interest rate on Treasury securities
will ________. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease