A doorknob manufacturer sells 400 doorknobs at a price of $10 each. It has total costs of $4,500, of which $700 are fixed costs. This means the firm
a. has an economic profit of $500
b. should produce in the short run at a loss
c. should shut down in the short run
d. has total variable costs of $500
e. has price less than average variable cost
B
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The multiplier for investment represents the ratio of the change in income to the change in investment spending
Indicate whether the statement is true or false
If most of the shocks that buffet the economy come from the output market shocks, then
A) fixed exchange rates are better than flexible exchange rates. B) flexible exchange rates are better than fixed exchange rates. C) which system is chosen is not important. D) fixed exchange rates are better than flexible exchange rates only in the short run. E) flexible exchange rates are better than fixed exchange rates only in the short-run.
Which of the following is a primary policy tool of the Federal Reserve?
A) The federal funds rate B) Open market operations C) The prime rate D) The money supply
Reducing tariffs would make international trade easier, which will increase the general economic welfare of the country
a. True b. False Indicate whether the statement is true or false