If, at the output where marginal revenue equals marginal cost, price is below average variable cost, a firm will shut down in the short run.
Answer the following statement true (T) or false (F)
True
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Which of the following statements is true?
A) Japan is more dependent on foreign trade than is the United States. B) Imports and exports account for over one-half of the GDP of Belgium. C) France is the leading exporting country, accounting for 10 percent of total world exports. D) Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice and corn crops.
One of the consequences of the U.S. trade deficit is that:
A. domestic inflation has resulted. B. the accumulation of American dollars in foreign hands has enabled foreign firms to build factories in America. C. the distribution of income in the United States has become less unequal. D. the system of flexible exchange rates has been abandoned in favor of a new gold standard.
In an economy, when the price level falls, consumers and firms buy more goods and services. This relationship is represented by the
A. aggregate demand curve. B. aggregate expenditures curve. C. short-run aggregate supply curve. D. long-run aggregate supply curve.
The limited liability rule means that if a corporation goes bankrupt:
A. Shareholders are responsible for all the debts of the firm B. Bondholders are responsible for all the debts of the firm C. Shareholders can only lose the amount they invested D. Bondholders only lose the face value of the bond