By shutting down, a firm
A) stops receiving revenue but continues to pay variable costs.
B) stops receiving revenue and is stuck with its fixed costs.
C) avoids its sunk costs as well as its variable costs.
D) can avoid paying taxes on its previously earned profits.
Answer: B) stops receiving revenue and is stuck with its fixed costs.
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A health club sells 50 memberships when the monthly price is $60 and 70 memberships when the monthly price is $40 . The price elasticity of demand for memberships at this health club is (using the average values method):
a. 0.25. b. 0.6. c. 1.0. d. 1.1. e. 0.83
Education is
A. generally financed at the state and local level. B. too expensive for the federal government. C. generally financed at the federal level. D. financed on a voluntary basis.
Referring to Table 4.1, Box H should be filled with 
A. $0. B. $150. C. $110. D. $125.
A firm that has a well-earned reputation for providing high quality:
A. will not survive in a market if low quality is provided at a lower price. B. has found a way to address the problem of adverse selection. C. has found a way to address the moral hazard problem. D. has found a way to address the free-rider problem.