A firm will shut down in the short run if, for all positive levels of output,
a. its losses exceed its fixed costs.
b. its total revenue is less than its variable costs.
c. the price of its product is less than its average variable cost.
d. All of the above are correct.
d
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"The level of employment in an economy determines its real GDP, other things held constant." Do you agree or disagree? Why? What assumptions are necessary for your conclusion based on the classical model?
What will be an ideal response?
Suppose there was a large increase in net exports. If the Fed wanted to stabilize output, it could
a. increase the money supply, which will reduce interest rates. b. decrease the money supply, which will reduce interest rates. c. increase the money supply, which will increase interest rates. d. decrease the money supply, which will increase interest rates.
Physical capital is distinguished from human capital because
A) physical capital refers to trained people. B) physical capital refers to equipment and machinery, whereas human capital refers to trained people. C) human capital refers only to day laborers. D) physical capital refers to trained people, whereas human capital refers to equipment and machinery.
If the death of an owner causes the firm to dissolve, the firm must have been
A. a proprietorship only. B. a partnership only. C. either a proprietorship or a partnership. D. a corporation only.