Answer the following statement(s) true (T) or false (F)
1. A firm earns a positive economic profit when the market price exceeds its marginal cost.
2. As long as profits remain positive, a firm will want to increase the quantity produced.
3. Only variable costs are relevant to a firm's decision to shut down.
4. When a firm has chosen to shutdown it has exited the industry.
5. A competitive firm will exit the industry in the long run if the price of its product falls below its average cost.
1. False
2. False
3. True
4. False
5. True
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Automatic stabilizers are changes in ________ that occur automatically as economic activity changes
A) taxes and transfer payments B) the money supply C) unemployment D) inflation
Well-being can be increased by:
A. policies that help people do business more efficiently. B. technologies that help people share more and better information. C. increasing the availability of accurate information. D. All of these are true.
For each size of plant a manufacturer could build, there is a different
a. long-run average fixed cost curve b. long-run average variable cost curve c. short-run average total cost curve d. long-run average total cost curve e. long-run marginal cost curve
Which of the following essential factors enables commercial banks to create money?
a. Required reserves b. Excess reserves c. State and local government securities d. U.S. government securities e. Net worth