Answer the following statements true (T) or false (F)
1. The break-even point on a break-even chart is equivalent to the point where MR = MC on a cost/output graph.
2. It may be beneficial for a firm that is suffering a loss to continue to operate in the short run as long as it is recovering its fixed cost.
3. Any revenue over and above total cost is labeled economic profit.
4. Wages paid are an example of an explicit cost of doing business.
5. Marginal cost is equal to the increase in total cost per unit of input divided by marginal product.
6. Under perfectly competitive conditions, marginal revenue is equal to the price at which a good is sold.
7. Average total cost is equal to total cost divided by marginal product.
8. Normal profit is considered an opportunity cost of operating a business.
1. FALSE
2. FALSE
3. TRUE
4. TRUE
5. TRUE
6. TRUE
7. FALSE
8. TRUE
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If the United States purchases oil from Kuwait, what is the effect in the exchange market? a. It will increase the supply of U.S. dollars
b. It will decrease the supply of U.S. dollars. c. It will increase the demand for U.S. dollars. d. It will decrease the demand for U.S. dollars.
Which of the following is not true about the composition of GDP in 2016?
A) The majority of consumer spending is on durable goods. B) Purchases made by state and local governments are greater than purchases made by the federal government. C) Imports are greater than exports. D) Business fixed investment is the largest component of investment.
Refer to the information provided in Figure 4.1 below to answer the question(s) that follow.
Figure 4.1Refer to Figure 4.1. Assume that initially there is free trade. If the United States then imposes a 10-cent tax per apple,
A. the price of apples in the United States will increase to 40 cents per apple. B. the quantity of apples demanded will be reduced by 2 million apples per day. C. the quantity of apples supplied by U.S. firms will increase by 2 million apples per day. D. all of the above
The over-the-counter (OTC) market is an example of a(n)
A) dealer market. B) brokered market. C) auction market. D) equilibrium market.