Figure 9.2 shows the cost structure of a firm in a perfectly competitive market. Suppose the current market price is $6 and the firm produces at a given output level. If the firm's total fixed cost increases due to a new government regulation, the short-run response of the firm should be to:(Note: since the question does not restrict the firm's response to the short run, we can't rule out that the rise in fixed cost will push the firm below the breakeven point and that the firm will exit the industry in the long run, thus decreasing its current output level.)
A. produce its current output level.
B. decrease its current output level.
C. increase its current output level.
D. There isn't sufficient information.
Answer: A
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(a) between 35% and 60%. (b) between 40% and 80%. (c) between 50% and 70% (d) between 50% and 90%.
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b. no longer looking for a job because they are discouraged about their prospects. c. jobless due to the seasonal nature of their jobs. d. jobless due to a recession in the economy.
Bob got laid off six months ago. He used to go to the movies once a month, but he's only been twice because he lost his job. This type of behavior can be measured using:
A. the income elasticity of demand. B. the price elasticity of supply. C. the price elasticity of demand. D. the cross-price elasticity.
Social overhead capital is basic infrastructure projects such as roads, power generation and irrigation systems.
Answer the following statement true (T) or false (F)