Which of the following represents the firm's short-run condition for shutting down?
a. shut down if TR < TC
b. shut down if TR < FC
c. shut down if P < ATC
d. shut down if TR < VC
d
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If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:
A. increased by $40 billion. B. increased by $15 billion. C. decreased by $15 billion. D. increased by $55 billion.
Economic theory suggests that the standard of living of American workers would rise if
a. technological change increased output per worker. b. the minimum wage were doubled. c. automation were outlawed. d. a larger proportion of the labor force was unionized.
______ identifies all of the input combinations that efficiently produce a given amount of output.
A. A production function B. An efficient production frontier C. A production possibilities curve
Suppose that a new drug has been approved to treat a life-threatening disease. The demand for that drug is shown on the accompanying graph. Prior to approval of this drug, the only treatment for this condition was any one of several non-prescription, or over-the-counter, pain relievers. The demand for one brand of the several non-prescription pain relievers is also shown on the graph.
A likely reason for the difference in the slopes of the demand curves is that:
A. one drug is heavily regulated by the Food and Drug Administration and the other is not. B. one market is in equilibrium and the other is not. C. one drug is new on the market, but the other has been available for a long time. D. the over-the-counter pain reliever has many substitutes, but the new drug does not.