When a perfectly competitive firm makes a decision to shut down, it is most likely that
A. fixed costs exceed variable costs.
B. marginal cost is above average variable cost
C. price is below the minimum of average variable cost
D. marginal cost is above average total cost
Answer: C. price is below the minimum of average variable cost
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Discouraged workers are included in labor force figures, but not in unemployment figures
a. True b. False Indicate whether the statement is true or false
A U.S. firm exchanges dollars for yen and then uses them to buy Japanese goods. Overall as a result of these transactions
a. both U.S. net capital outflow and U.S. net exports rise. b. both U.S. net capital outflow and U.S. net exports fall. c. U.S. net capital outflow rises and U.S. net exports fall. d. U.S. net capital outflow falls and U.S. net exports rise.
If the United States exports 6 million bushels of corn to Japan and thereby earns income with which it imports 3 million digital video recorders from Japan, the United States' terms of trade with Japan for corn and digital video recorders is 2:1.
a. true b. false
Two problems that arise from asymmetric information are:
A. adverse selection and diseconomies of scale. B. moral hazard and the free-rider problem. C. the free-rider problem and adverse selection. D. moral hazard and adverse selection.