Question

When opening a print shop you need to buy printers, computers, furniture, and similar items. Economists call these expenditures a capital investment. b. investment in human capital. c. personal saving. d. business consumption expenditures. 26. Who among the following is a free rider? a. Bert takes the commuter rail to work, but he purchases the discounted monthly passes rather than buying tickets each day. b. Oscar goes to Elmo's house to watch a football game on the local television channel. c. Grover sends his 5 children to a private school rather than to the public school in his neighborhood. d. Emie listens to National Public Radio, but does not contribute to any fundraising efforts. Figure 14-13 Suppose a firm in a competitive industry has the following cost curves: lo I MC ATC AVC 1 2 3 4 5 6 7 8 Quantity 27. Refer to Figure 14-13. If the price is $6 in the short run, what will happen in the long run? a. Because the price is below the firm's average variable costs, the firms will shut down. b. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry e. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. d. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry.

Answer 1

25. Option A

Explanation: Capital investment helps a firm in producing its outputs.

26. Option D

Explanation: In free-riding problem, a person uses a good without paying for it

27. Option B

Explanation: The price is higher than the lowest ATC. Some firms would earn positive economic profits and new firms will enter the industry,