If a firm's sales are $50 million; its fixed costs are $10 million, and its variable costs are $52 million, what does it do in the (a) short run and (b) long run?
What will be an ideal response?
(a) shut-down; (b) go out of business
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The uncertainty costs of inflation cause people to
A) incur more shoe leather costs. B) increase their demand for money. C) focus on the long run, which increases investment and speeds growth. D) focus on the short run, which decreases investment and slows growth. E) increase investment causing economic growth to decrease.
If the price level is constant in the short run,
A) the short-run aggregate demand curve is horizontal. B) the short-run aggregate demand curve is vertical. C) the short-run aggregate supply curve is horizontal. D) the short-run aggregate supply curve is vertical.
When the Fed buys government securities in the open market, the money supply ________ because ________
A) decreases; banks lose liquidity, they make fewer loans and checking account deposits decrease B) increases; banks gain liquidity, they make more loans and checking account deposits increase C) increases; banks lose liquidity, they make more loans and checking account deposits increase D) decreases; banks gain liquidity, they make fewer loans and checking account deposits decrease E) none of the above
A U.S. tourist travels to Italy and spends $900 during the trip. How is this activity recorded in the U.S. current account?
a. Unilateral transfers account is credited for $900. b. Unilateral transfers account is debited for $900. c. Merchandise account is credited for $900. d. Services account is debited for $900. e. Merchandise account is debited for $900.