Which of the following does not characterize a perfectly competitive firm that has shut down in the short run?
a. total revenue equals zero
b. variable costs equal zero
c. the firm suffers a loss
d. fixed cost is positive
e. fixed cost is zero
E
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Suppose you run a charity that raises money for a worthy public good. Your donors may be concerned about how much of each dollar that is raised is put back into more fund-raising. a. Suppose the marginal product of a dollar put into fundraising is initially increasing but eventually diminishing. How much will the last dollar spend on fundraising raise?
b. If everyone considers their own contribution to this charity as the marginal contribution, what will be their impression of how much they are really helping the public good? c. Would you expect your answer to (b) to make it harder for you to raise money for your charity? d. How might your answer to (c) explain why some charities make a point of informing people that they have placed a cap on their fund raising budget -- or that they have placed a cap on how many people will be approached during the fund raising campaign? What will be an ideal response?
Which of the following arguments is often used by opponents of Federal Reserve independence?
A) Independence slows the policy decision process. B) Independence causes inflationary pressures to build because of excessive monetary growth. C) Independence leads to conflicts between monetary and fiscal policy. D) Independence causes a concentration of financial power.
According to the equation of exchange, how can national income grow even though the amount of money does not?
A) price level increases B) real GDP decrease C) velocity increases D) velocity decreases
The short-run Phillips curve implied when all changes in aggregate demand are caused by changes in the money supply is
a. upward sloping. b. downward sloping. c. horizontal. d. vertical. e. None of the above