If price is between AVC and ATC, the best and most practical thing for a perfectly competitive firm to do is
A) raise prices.
B) lower prices to gain revenue from extra volume.
C) shut down immediately, but not liquidate the business.
D) shut down immediately and liquidate the business.
E) continue operating, but plan to go out of business.
E
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As the wage rate decreases, the amount of time spent on market work usually
a. increases because the opportunity cost of nonmarket work increases b. increases because of the substitution effect c. decreases because of the income effect d. decreases because the value of leisure time increases e. decreases because the opportunity cost of leisure declines
Sharon wants a career as an accountant. During the summer she turns down a job painting houses at $6 an hour to work in an accounting office for $4 an hour. Which of the following would not explain her choice?
a. Accounting is more prestigious. b. The summer accounting job will help her get a full-time job in accounting when she graduates. c. She prefers to work inside. d. She would face the law of diminishing marginal utility if she had more goods. e. She dislikes the messiness of painting.