A firm is experiencing a loss of $5,000 per year when operating. The firm has fixed costs of $8,000 per year. The firm should _________ in the short run and should _________ in the long run.
a. operate; shut down
b. shut down; operate
c. operate; operate
d. shut down; shut down
a. operate; shut down
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TheWall Street Journalreports that “hard times aid poultry companies as people eat cheaper fowl.” In the language of economists, this means
A. chicken is an inferior good. B. chicken has a negative substitution effect. C. chicken has a positive substitution effect. D. people’s tastes change during recessions. E. chicken has a positive income effect.
Suppose that the wage paid to workers who detassel corn rises. What happens in the market for workers who weed soybean fields, given that workers who detassel corn can easily work weeding soybean fields?
a. The demand curve for soybean workers increases. b. The demand curve for soybean workers decreases. c. The supply curve for soybean workers increases. d. The supply curve for soybean workers decreases.
Which of the following would increase productivity?
a. an increase in the physical capital stock per worker b. an increase in human capital per worker c. an increase in natural resources per worker d. All of the above are correct.
You are a Canadian citizen who works in Toronto and owns a winter home in Phoenix, Arizona. When you spend the winters in Phoenix, an increase in the value of the Canadian dollar relative to the U.S. dollar should
A) help you as each Canadian dollar of your salary is now worth more U.S. dollars. B) hurt you as each Canadian dollar of your salary is now worth less U.S. dollars. C) hurt you as it is now more expensive to live in Phoenix since the Canadian dollar appreciation. D) help you as it is now less expensive to live in Canada since the Canadian dollar appreciation.