Refer to Figure 22.3 for a perfectly competitive firm. If the market price is $10,
A. The firm should produce 31 units.
B. The firm will shut down in the short run.
C. The firm will earn normal profits.
D. An economic loss will occur.
Answer: D
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Assuming that as a result of observed past increases in the aggregate price level, workers' expectation of the current price level rises. Then,
a. less labor will be supplied at each money wage because with the higher expectation about the aggregate price level since a given money wage corresponds to a lower real wage. b. the firm has to pay a higher money wage in order to obtain a given quantity of labor. c. more labor will be supplied at each money wage because with the higher expectation about the aggregate price level since a given money wage corresponds to a higher real wage. d. Both a and b e. Both b and c
As a firm expands into overseas markets, information problems and the complexity of operating within many varied cultures and economies may result in
a. constant returns to scale b. diminishing marginal returns c. declining long-run marginal cost d. diseconomies of scale e. economies of scale
What is the difference between socialism and communism? What are some examples of countries that are largely socialistic and some that are communistic?
If the MPC = 0.75, then the spending multiplier must be:
A. 3 B. 4 C. 5 D. 1.25