If a competitive firm is losing money then it should:
a. always shut down.
b. shut down if its losses are greater than total fixed costs.
c. shut down if its total fixed costs are greater than losses.
d. raise its price.
b
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How do economists view profits?
A) The firm's profit equals the sum of all payments to the 5 factors of production. B) Profits are an asset the business holds. C) Profits are guaranteed as long as a firm operates ethically. D) Profits are one of the costs paid to a factor of production.
Suppose the measured unemployment rate is 6.1% and the true natural rate of unemployment is 5.1%. If the chair of the Fed believes the natural rate of unemployment to be 6.7%, then the chair will
A) stimulate the economy when it should be slowed. B) slow the economy when it should be stimulated. C) stimulate the economy, exactly as called for. D) slow the economy, exactly as called for.