If a firm can vary all of its factors of production, it is operating in
A. the long run.
B. the short run.
C. equilibrium.
D. the immediate run.
Answer: A
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Use the information in the following table, which summarizes the payoffs (i.e., profit) to two firms that must decide between an average-quality and a high quality product, to answer the questions that follow:
Firm 2 Average Quality High Quality Firm 1 Average Quality 600, 600 400, 1100 High Quality 1100, 400 900, 900 a. What is each player's dominant strategy? Explain your reasoning. b. Referring to the table above, is this an example of a prisoner's dilemma game? Why or why not? c. Is there a Nash equilibrium? If so, what is it?
If a 10 percent cut in the price of video rentals at "That's Rentertainment" causes a 15 percent increase in the quantity of rentals demanded, then
a. total revenue will decrease b. demand is price inelastic within that price range c. demand is price elastic within that range d. demand is unit elastic within that range e. total revenue will remain the same
Heartland and Soulland) If trade now opens up between the two economies, we can expect that:
A) Heartland will export drill presses to Soulland and import corn from it. B) Heartland will export corn to Soulland and import drill presses from it. C) both countries will export corn and drill presses. D) both countries will import corn and drill presses.
Tina Eckstrom and her husband bought a deferred annuity that started paying them $700 a month in retirement benefits. They, along with millions of other people who live on fixed incomes, are examples of:
A. those who are responsible for inflation. B. the big winners from inflation. C. the big losers from inflation. D. the paradox of thrift.