Use the following graph for a perfectly competitive firm to answer the next question.
The firm's short-run supply curve is
A. the "cd" segment and above on the MC curve.
B. the "abcd" segment and above on the MC curve.
C. not shown.
D. the "bcd" segment and above on the MC curve.
Answer: D
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You are a major stockholder of a large corporation. You have news from a credible source that the company's earnings report is going to indicate record losses
If you and other major stockholders receive the same news, what is your likely behavioral response and what impact will that have on the price of the company's stock?
Ford assembles some cars in Mexico because the lower wages the company pays to Mexican workers and the lower prices it pays for auto parts in Mexico reduces Ford's costs. This is an example of Ford reacting to which of the three key economic ideas?
A) People are rational. B) People respond to economic incentives. C) Optimal decisions are made at the margin. D) Firms attempt to maximize revenues.