Explain why shutting down and going out-of-business are different concepts
What will be an ideal response?
Shutting down means that the firm seizes production with the option of starting up production any time in the future. Going out-of-business is equal to exiting the industry. This involves reducing the amount of (the fixed input) capital to zero, which is not possible in the short run.
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Which of the following should be included in U.S. GDP?
A) a 3D television manufactured in Thailand and sold in the United States B) a 3D television manufactured in the United States and sold in Thailand C) a 3D television manufactured in Thailand by a U.S. firm and sold in the United States D) a used 3D television manufactured in the United States and sold in Thailand
How does each of the following shift the supply of loanable funds and the demand for loanable funds curves? What is the effect of each on the equilibrium real interest rate and equilibrium quantity of loanable funds?
a. Households' disposable incomes increase b. An increase in expected profit
If demand for a seller’s product is elastic, a price increase will decrease total revenue.
Answer the following statement true (T) or false (F)
An export subsidy will cause the relative demand for ________ to ________ and the relative supply for ________ to ________
A) exports; decrease; exports; increase B) imports; decrease; imports; increase C) imports; increase; imports; decrease D) exports; increase; exports; decrease E) exports; increase; imports; decrease