Will a perfectly competitive firm ever produce in the short run even though it is suffering an economic loss?
What will be an ideal response?
Yes, a perfectly competitive firm will continue to produce even though it is suffering an economic loss if the price exceeds the minimum average variable cost. In this case, even though the firm has an economic loss, if it shut down, its economic loss would be larger.
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To say that a given welfare program is means-tested implies that:
A. in order to qualify, one must show that one means to find a job. B. the more income one earns, the smaller the size of the benefit. C. in order to qualify, one must have the means. D. the size of the payment reflects the mean value of consumption based on family size.
The stock of wealth increases more rapidly the faster the flow of ________.
A. saving B. money C. income D. assets
The existence of a monopoly:
A. creates market inefficiencies. B. causes a reduction in total surplus. C. causes consumers to get less at a higher price. D. All of these statements are true.
Assume that at the beginning of 2012, one dollar could be traded for 5 yuan. If in 2013 one dollar was being traded for 6 yuan, it can be concluded that:
A) the dollar appreciated against the yuan and the yuan depreciated against the dollar in 2013. B) the real exchange rate changed in 2013 assuming PPP holds. C) the nominal exchange rate did not change in 2013. D) the dollar depreciated against the yuan and the yuan appreciated against the dollar in 2013.