Competitive firms consider private costs, but disregard external costs, when making their economic decisions
a. True
b. False
Indicate whether the statement is true or false
True
You might also like to view...
If expectations about the future don't change at all, then an economic downturn will generally:
A. decrease savings at a given interest rate and shift the supply curve for loanable funds to the left. B. increase savings at a given interest rate and shift the supply curve for loanable funds to the left. C. decrease savings at a given interest rate and shift the supply curve for loanable funds to the right. D. increase savings at a given interest rate and shift the supply curve for loanable funds to the right.
If a college enforces a new policy where anyone caught cheating is immediately expelled, the basic postulate of economics suggests that
A) the amount of cheating will be unaffected. B) any of the above is possible because student behavior is unpredictable. C) fewer students will attempt to cheat. D) cheating will be completely eliminated.
Government imposed price controls often lead to
A. the most efficient use of resources. B. the equilibrium solution in terms of price and quantity. C. maximization of profits. D. illegal trades of the good.
A firm is currently producing at the point where MC = MR. The situation for the firm at this point is P = $5, Q = 100, ATC = $6, AVC = $4.50. What do you recommend this firm do?
A. Increase production above the current output rate, because MC = MR at this rate of output. B. Shut down, because ATC > P. C. Shut down, because AVC > P. D. Continue to produce the current output rate, because P > AVC.