Evaluate this statement: “If the economic profit is zero, a business will shut down.”
Please provide the best answer for the statement.
This statement is incorrect. If economic profits are zero, it means the business is covering all of its explicit and implicit costs, including the normal profit. Thus the business has no incentive to shut down and open a business in another industry, and it will maintain its line of work.
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Discuss the factors that determine the ultimate burden of the corporate tax
What will be an ideal response?
Refer to Figure 9.1. Assume the economy is initially at point A. The initial change from a shock that increases investment expenditure is best represented by which short-run equilibrium combination of price level and real GDP?
A) P2; Y2 B) P3; Y2 C) P1; Y2 D) P2; Y1
The supply curve of a producer, whose costs vary continuosly with output will be:
a. a straight line vertical to the output axis. b. a straight line horizontal to the output axis. c. the positively sloped portion of the marginal cost curve. d. the negatively sloped portion of the marginal cost curve.
Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys their goods in large quantities and therefore at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices and free parking. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that:
A. consumers are boycotting local retailers. B. Wal-Mart engages in illegal acts of monopolization. C. there are diseconomies of scale in retail sales. D. there are economies of scale in retail sales. E. Wal-Mart is managed by ruthless business people.