If the present value of all future profit is positive, then
A) the firm should remain operating, even if it earns negative profit in the short run.
B) the firm should shut down if it is earning a negative profit in the short run.
C) the firm should shut down if it cannot cover its fixed costs in the short run.
D) None of the above.
A
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A large timber farm supplies large building contractors with plywood and stick lumber. The managers of the timber farm have noticed that the demand for their timber tends to fluctuate with long-term business cycles and short-term changes in their timber production lead to sharp increases in their marginal cost. With this information, it is likely that ________-term forecasts are more valuable to
the managers of the timber farm and the cost of ________-term forecasts are likely to exceed their benefit. A) short; extended B) short; long C) long; short D) long; extend
What statement most accurately describes the U.S. colonial economy in the 1700s?
a. The Middle Colonies had big trade surpluses from their large shipments of food. b. The majority of the population lived in the large urban areas along the Atlantic coast. c. Once indentured servants completed their indentures, they moved to the lower South, where the agricultural productivity was highest. d. Colonial America was the first region in the world to permanently use paper money.
Education would be considered investments in:
a. physical capital b. financial capital c. human capital d. all of the above
The reserve ratio is 10 percent. If the Fed buys $1 million of U.S. government securities from a bond dealer by transmitting the funds to the dealer's deposit account at Bank ABC, then
A. Bank ABC can make additional loans up to $900,000. B. Bank ABC cannot make any additional loans, but the system as a whole can make additional loans up to $1 million. C. Bank ABC can make no additional loans. D. Bank ABC can make additional loans up to $1 million.