Economics is a study of
A) how to make money in the stock market.
B) how to run a business successfully.
C) the allocation of scarce resources.
D) personal finance.
C
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One reason the total sum of the income categories does not equal GDP is that
A) taxes are generally larger than subsidies and the depreciation of capital is negligible. B) GDP values goods and services at retail prices and the income approach values them at wholesale cost. C) people do not spend all their income, so the value of consumption expenditure is less than the value of wages. D) GDP does not include depreciation, which is part of the income categories. E) GDP values goods and services at market prices and the income approach values them at factor cost.
A firm could continue to operate for years without ever earning a profit as long as it is producing an output where
A) MR < ATC. B) ATC > AVC. C) MR > AVC. D) AFC < AVC.