"A good business decision maker will never sell a product for less than it costs to produce." This statement is
a. true because diminishing returns always cause marginal costs to rise in the short run.
b. false because diminishing returns always cause fixed costs to rise in the short run.
c. true because it clearly differentiates between accounting profit and economic profit.
d. false because a business decision maker may be covering his current variable costs even though he has failed to cover all previous production costs.
D
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Compared to perfect competition, a monopoly will produce ________ output, and charge a ________ price
A) more; higher B) more; lower C) less; higher D) less; lower
The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 2 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:
A. decrease by 4,000 dollars per period. B. decrease by 2,000 dollars per period. C. increase by 4,000 dollars per period. D. increase by 2,000 dollars per period.
The proportion of the labor force that is unemployed is the
A. Unemployment rate. B. Okun's Law. C. Employment index. D. Underemployed rate.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.