A firm operating in a perfectly competitive industry will shut down in the short run if its economic profits fall to zero because it is likely to be earning negative accounting profits
a. True
b. False
Indicate whether the statement is true or false
False
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Workers expect inflation to rise from 3% to 5% next year. As a result, this should
A) shift the short-run aggregate supply curve to the left. B) move the economy down along a stationary short-run aggregate supply curve. C) shift the short-run aggregate supply curve to the right. D) move the economy up along a stationary short-run aggregate supply curve.
If the demand for good A is more elastic than the demand for good B, a small increase in supply in both markets will cause
a. a much greater decrease in price for good A than for good B b. a much greater decrease in price for good B than for good A c. the price will decrease by the same amount in both markets d. only the price of good B will decrease e. only the price of good A will decrease
Diminishing marginal product suggests that the marginal
a. cost of an extra worker is unchanged. b. cost of an extra worker is less than the previous worker's marginal cost. c. product of an extra worker is less than the previous worker's marginal product. d. product of an extra worker is greater than the previous worker's marginal product.
The slope of a production possibilities frontier
A) has no economic relevance or meaning. B) is always constant. C) is always varying. D) measures the opportunity cost of producing one more unit of a good.