If price lies above the minimum point on the ATC curve, in the short run the firm should ________ and in the long run it should ________.
A. shut down; exit the industry
B. shut down; expand
C. produce where MC = MR; expand
D. produce where MC = MR; exit the industry
Answer: C
You might also like to view...
According to the flexible price framework ________
A) an increase in inflation raises real savings B) an increase in the money supply raises real output C) an increase in inflation lowers real investment D) all of the above E) none of the above
Which of the following is TRUE about producers' willingness to offer warranties on products?
A) Producers are equally likely to offer warranties on high-quality and low-quality goods. B) Producers are more likely to offer warranties on low-quality goods, because without the signal that the warranty provides, the low-quality good wouldn't sell. C) Producers are more likely to offer warranties on high-quality goods, because the expected cost of repairs is lower for those goods. D) Producers have an incentive to deal with third-party companies to provide the warranties, so that an "impartial" view of the product is given to the consumer. E) Producers will not offer warranties in any market that suffers from asymmetric information.
The word that best describes the relationship between the required reserve ratio and the money supply is
A) direct. B) constant. C) inverse. D) roundabout.
Refer to the information provided in Figure 33.1 below to answer the question(s) that follow.
Figure 33.1Refer to Figure 33.1. The opportunity cost of producing a bushel of alfalfa in Canada is
A. the same as that in the United States. B. half as much as that in the United States. C. twice as much as that in the United States. D. four times as much as that in the United States.