In the short run, a perfectly competitive firm will shut down if
a. its total costs exceed its revenues.
b. its total variable costs exceed its revenues.
c. its total fixed costs exceed its revenues.
d. it can't earn a positive economic profit.
B
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A piece of evidence in favor the Keynesian model would be that
a. investment is very sensitive to changes in tax rates. b. changes in aggregate income cause changes in investment, but not vice versa. c. the aggregate price level is negatively correlated with income. d. all of the above.
A labor market is divided into two segments. All workers have the same qualifications and find jobs in either segment equally attractive. Initially, both segments are in competitive equilibrium. If the development of employer prejudice then reduces the employment of minorities in one segment, there will be a
a. permanent drop in labor supply to the discriminating segment b. permanent increase in labor supply to the nondiscriminating segment c. temporary drop in labor supply to the discriminating segment d. permanent drop in labor demand to the discriminating segment e. temporary drop in labor demand to the nondiscriminating segment
A t-shirt maker would be willing to supply 75 t-shirts per day at a price of $18.00 each. At a price of $20.00, the t-shirt maker would be willing to supply 100 t-shirts. Using the midpoint method, the price elasticity of supply for t-shirts is about
a. 0.37, and supply is elastic. b. 0.37, and supply is inelastic. c. 2.71, and supply is elastic. d. 2.71, and supply is inelastic.
Which of the following correctly explains the crowding-out effect?
a. An increase in government expenditures decreases the interest rate and so increases investment spending. b. An increase in government expenditures increases the interest rate and so reduces investment spending. c. A decrease in government expenditures increases the interest rate and so increases investment spending. d. A decrease in government expenditures decreases the interest rate and so reduces investment spending.