Answer the following statement(s) true (T) or false (F)
1. At zero economic profits, a firm covers both its implicit and explicit costs.
2. Variable costs are costs that vary with input.
3. If P < AVC, then a profit-maximizing firm will shut down.
4. As a cost relation, the short-run supply curve shows the marginal cost of producing any given output.
5. As word gets out that a market is profitable, the supply curve will shift to the left.
1. TRUE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
You might also like to view...
If whenever one variable increases, another variable also increases, then these two variables are ________ related
A) inversely B) positively C) cross-sectionally D) trend-line E) negatively
In the presence of negative pollution externalities, it is more efficient to have Cournot competitors than Bertrand competitors.
Answer the following statement true (T) or false (F)
According to the law of one price, identical products should sell for the same price everywhere if
A) transactions costs are zero. B) consumers have knowledge of the prices charged for products in different markets. C) there are no tariffs or other restrictions on imports or exports. D) firms can prevent consumers from engaging in arbitrage.
What all "New Classical" models have in common is the assumption of
A) imperfect information. B) continuous clearing of product and labor markets. C) the primary importance of technological and supply shocks in causing business cycles. D) downward nominal wage rigidity. E) countercyclical real wages.