If the price of a good is below the shutdown point, a perfectly competitive firm earns zero profits
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose that at the current level of output, price = $12, MC = $14, AVC = $7, and ATC = $9. Which of the following is TRUE?
A) The firm should decrease output. B) The firm should shut down. C) The firm should increase output. D) The firm should maintain the current level of output.
A severe freeze has once again damaged the Florida orange crop. The impact on the market for oranges will be a leftward shift of: a. the demand curve, as consumers try to economize because of the shortage
b. the demand curve and a rightward shift of the supply curve. c. the supply curve. d. the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.
The maximin criterion suggests that social policy should
a. expropriate the factors of production from the capitalist class. b. ensure an equal distribution of income. c. elevate the well-being of those at the bottom of the income distribution. d. elevate the well-being of all workers.
According to Table 2.1, which presents hypothetical data on price elasticity of demand, which of the following is true about lamb?
A. Each 2.7% change in the price of lamb causes a 1% change in the quantity demanded of lamb.
B. The demand for lamb is inelastic.
C. Each 1% change in the price of lamb causes a 2.7% change in the quantity demanded of lamb.
D. Lamb is a normal good.