In the short run, firms earning a profit will want to ________ their profits while firms suffering losses will want to ________ their losses.
A. minimize; minimize
B. maximize; minimize
C. minimize; maximize
D. maximize; maximize
Answer: B
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If the aggregate price level ________, but nominal wages stay fixed, labor demand ________
A) falls; remains unchanged B) rises; falls C) rises; remains unchanged D) falls; falls
Collusion is a situation where businesses:
A. agree to cooperate, and the U.S. government works hard to encourage this behavior. B. have noncooperative outcomes, because they compete outside the public eye. C. agree to cooperate, and their behavior does not serve the public interest. D. act in their own self-interest and ignore what the other businesses are doing.
Which of the following will become smaller and smaller as the firm expands output?
a. average total cost. b. average fixed cost . c. marginal cost. d. total fixed cost.
The measures of absolute poverty:
a. are inversely related to the degree of income equality in a country. b. are directly related to the degree of income equality in a country. c. depend on the prosperity of the poorest 50 percent of population. d. determine the degree of income inequality. e. are completely independent of the degree of income inequality.