If a perfectly competitive firm is producing at a quantity at which MC < AVC, it cannot be maximizing profit in the short run
a. True
b. False
A
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Refer to Figure 17-6. Under Scheme I
A) workers signal their productivity to the firm by consistently selling above 30 vacuum cleaners. B) the incentive to increase productivity only occurs for sales of fewer than 20 vacuum cleaners or more than 30 vacuum cleaners. C) workers compete with each other to see who can sell more than 20 vacuum cleaners in the shortest possible time. D) workers have no incentive to sell more than 30 vacuum cleaners.
Property rights and a strong titling system are seen as important to economic development because they allow:
A. loans to be taken out without risk, increasing the quality, not quantity, of investment. B. loans to be taken out against the equity of their assets, increasing investment. C. agencies with authority to verify titling to thrive in the economy. D. savers to invest in property and capital.
Keynesians
A. believe capitalism is inherently unstable. B. contend that government intervention in the economy is undesirable. C. advocated a laissez-faire policy. D. believe wages and prices are flexible downward.
A perfectly competitive firm in the long run earns:
A. zero economic profits and zero normal profits. B. positive normal profits but zero economic profits. C. positive economic profits but zero normal profits. D. positive economic profits and positive normal profits.