Economics - Study Mode

[#466] A firm should shut down in the short run if it is not covering its
Correct Answer

(A) Variable cost

Explanation

Solution: A firm should shut down in the short run if it is not covering its Variable cost. In the short run, a firm that is operating at a loss (where the revenue is less that the total cost or the price is less than the unit cost) must decide to operate or temporarily shutdown. The shutdown rule states that “in the short run a firm should continue to operate if price exceeds average variable costs. ”

[#467] Economic problems arise because
Correct Answer

(D) All of the above

Explanation

Solution: Economic problems arise because Wants are unlimited, Resources are scarce and Scare resources have alternative uses.

[#468] In the short run, when the output of a firm increases, its average fixed cost
Correct Answer

(B) Decreases
(F) Decreases

Explanation

Solution: In the short run, when the output of a firm increases, its average fixed cost decreases.

[#469] Elinor Ostrom and Oliver Williamson are the Nobel Prize Laureates in Economics in 2009. Do you know in which year was Francois Quesnay's Tableu Economique published?
Correct Answer

(D) 1758

Explanation

Solution: Elinor Ostrom and Oliver Williamson are the Nobel Prize Laureates in Economics in 2009. In the year 1758, Francois Quesnay's Tableu Economique was published.

[#470] Identify the author of "The principles of Political Economy and Taxation"
Correct Answer

(C) David Ricardo

Explanation

Solution: The Principles of Political Economy and Taxation (19 April 1817) is a book by David Ricardo on economics. Ricardo claims in the preface that Turgot, Stuart, Adam Smith, Jean-Baptiste Say, Sismondi, and others had not written enough "satisfactory information" on the topics of rent, profit, and wages.