A firm will shut down in the short run if
A. P < AVC.
B. P > AVC.
C. AVC > AFC.
D. TR > TC.
Answer: A
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An increase in technology will always produce economic growth in society
A. True B. False
Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good.
Answer the following statement true (T) or false (F)
Sarah and David both have linear demand curves for lemonade. Sarah's demand curve for lemonade intersects David's demand curve at a price of 50 cents per glass. Sarah's demand curve is more inelastic than David's
A change in the price of lemonade from 50 cents to 25 cents per glass will A) decrease Sarah's consumer surplus more than David's. B) decrease David's consumer surplus more than Sarah's. C) increase Sarah's consumer surplus more than David's. D) increase David's consumer surplus more than Sarah's.
When there are very few substitutes for a good, the demand for the good will tend to be
A) inelastic. B) elastic. C) unitary. D) perfectly elastic.