The benefit to employers of deferred payments is that
A) adverse selection is eliminated.
B) employers cannot engage in any opportunistic behavior.
C) these payments raise the cost of being fired, so more monitoring is needed.
D) these payments raise the cost of being fired, so less monitoring is needed.
D
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Suppose the AC curve is U-shaped. Then an increase in a recurring fixed cost will cause the AC curve to shift up, with its lowest point shifting to the right.
Answer the following statement true (T) or false (F)
The neighborhood ice cream shop finds that when it charges $3 per ice cream cone, its total revenues are $90,000. It has total variable costs of $30,000 and total fixed costs of $40,000. From this we can infer the:
A. shop sells 10,000 ice cream cones. B. price is less than average total cost. C. economic profits are $20,000. D. shop will be closed in the long run.