A firm realizes that the market price has fallen below its average total costs, and it is now earning a loss. What is the best action for the firm to take in the short run?
A. Stay open if price is greater than average variable costs.
B. Shut down immediately and pay fixed costs only.
C. Stay open if total revenue is greater than fixed costs.
D. Shut down if price is greater than average variable costs.
A. Stay open if price is greater than average variable costs.
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While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008, others were critical of these actions. The critics were concerned that by not allowing large firms to fail
A) stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy. B) there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail. C) there will be less competition in the U.S. economy, which could led to higher prices for consumers. D) smaller firms will resent not receiving similar assistance.
Potential problems with incentive based compensation are
a. not evaluating the relevant performance measures b. rewarding outcomes that are not include in the performance evaluation c. not funding rewards for meeting performance measures d. all of the above
Related to the Economics in Practice on page 704: Of the children under 5 years of age in the world who are characterized as extremely short due to malnutrition, one half are in
A. Asia. B. Africa. C. South America. D. Eastern Europe.
Answer the following statements true (T) or false (F)
1. Accommodation involves minimum intrusion on the part of the superior, who attempts to smooth over differences between those engaged in the conflict. 2. Competition and compromise strategies generally result in win-win outcomes, where all sides win. 3. Sergeants frequently use compromise when they make the work schedule in an attempt to divide days off and hours worked so that everyone is accommodated to some extent. 4. The most common reaction to conflict is competition.