If a perfectly competitive firm is facing a situation where the price of its product is lower than the average total cost, which of the following statements is true?
A. Other firms will want to enter the industry because of the economic profits generated by the firm.
B. The firm may earn economic profits in the long run if it expands its plant in order to exploit economies of scale.
C. The firm may be earning some accounting profits, but less than what it could earn elsewhere.
D. The firm is generating a loss, and if things are not expected to improve the firm will leave the industry.
Answer: D
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a. True b. False Indicate whether the statement is true or false
Best National Bank is subject to a 20 percent required reserve ratio. If this bank received a new checkable deposit of $1,000 . it could make new loans of:
a. $500 b. $800. c. $1,000 d. $5,000.
Suppose you were told that Botswana had few skilled workers, a primitive banking system, and an inefficient and limited electric power industry. You would know that the person was describing was Botswana's problem with
a. its economic infrastructure b. political stability c. its agricultural sector d. its traditional values e. poverty
Savers supply funds to those who want to borrow for their investment spending needs in the:
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