Refer to the data provided in Table 9.1 below to answer the question(s) that follow.
Table 9.1
Refer to Table 9.1. If the market price is $17, then in the short run the firm will
A. operate and expand.
B. operate but not expand.
C. shut down, but not go out of business.
D. go out of business.
Answer: B
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About six months ago, Pat lost the job as vice president of a local bank. Since losing the job, Pat still has the Sunday newspaper delivered every week. For Pat, the Sunday newspaper is
A) income inelastic. B) price inelastic. C) an inferior good. D) a normal good because Pat still buys the paper even with a big loss of income.
What is productive efficiency?
A) a situation in which firms produce as much as possible B) a situation in which resources are allocated such the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it C) a situation in which resources are allocated such that goods can be produced at their lowest possible average cost D) a situation in which resources are allocated to their highest profit use