If a firm operating in a competitive industry shuts down in the short run, it can avoid paying
a. fixed costs.
b. variable costs.
c. total costs.
d. The firm must pay all its costs, even if it shuts down.
b
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You have an absolute advantage whenever you
A) are better educated than someone else. B) can produce something at a lower opportunity cost than others. C) prefer to do one particular activity. D) can produce more of something than others with the same resources.
Banks responded to disintermediation by
A) supporting the elimination of interest rate regulations, enabling them to better compete for funds. B) opposing the elimination of interest rate regulations, as this would increase their cost of funds. C) demanding that interest rate regulations be imposed on money market mutual funds. D) supporting the elimination of interest rate regulations, as this would reduce their cost of funds.