If the average cost of flying the next flight is zero and one passenger is on the plane and has paid $50, should the next flight be flown?
A) Yes.
B) No.
C) Can't tell from the data provided.
D) The plane should wait for at least one more passenger.
C
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The shutdown decision can be restated in terms of producer surplus by saying that a firm should produce in the short run as long as
A) revenue exceeds producer surplus. B) producer surplus is positive. C) producer surplus exceeds fixed cost. D) producer surplus exceeds variable cost. E) profit and producer surplus are equal.
"Empirical studies of economic growth are flawed because many of the truly important underlying determinants, such as culture and institutions, are very hard to measure."
Discuss this statement paying particular attention to simple cross-section data and panel data models. Use equations whenever possible to underscore your argument. What will be an ideal response?