During the course of a week, McDonald's has enough time to hire or layoff workers, but it does not have enough time to expand its kitchen or add an additional seating area. In this situation, McDonald's:
a. has no fixed costs.
b. is in the short run.
c. suffers an economic loss.
d. earns a large profit.
b
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Assume that the market clearing price for a shirt is $20, but that the maximum price that can be charged is $15. This is an example of
A) a price control that will lead to a surplus of shirts on the market. B) a price floor that will lead to a shortage of shirts on the market. C) markets failing to ration a fixed quantity of a good. D) a price ceiling that will likely lead to a shortage of shirts on the market.
A country can achieve some combination of goods outside its production possibilities curve by:
A. idling some of its resources. B. specializing and engaging in international trade. C. buying the debt (bonds and stocks) of foreign nations. D. producing more capital goods and fewer consumer goods.