When a firm has an accounting profit that is negative, it
A) will never produce output, even in the short run.
B) may still have economic profit.
C) has total revenue that is less than total cost.
D) cannot be producing where price equals marginal cost.
Answer: C
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Maureen left her teaching job, which paid $30,000 per year, and invested $20,000 of her retirement fund (which was earning 10 percent interest) in a new real estate business. Her accountant predicted a $60,000 revenue the first year. Her husband, an economist, forecast her profit to be
A. $10,000. B. $28,000. C. $32,000. D. $60,000.
In perfect competition, a firm’s marginal revenue equals the price of the product.
Answer the following statement true (T) or false (F)
How can the economy of Canada be characterized?
a. free market b. centrally planned c. mixed, but on the side of centrally planned d. mixed, but on the side of free market
The IS curve would unambiguously shift up and to the right if there were
A. an increase in both government purchases and the expected future marginal product of capital. B. an increase in both government purchases and corporate taxes. C. an increase in the expected future marginal product of capital and a decrease in expected future output. D. a decrease in both corporate taxes and the expected future marginal product of capital.