Figure 3 30. Refer to Figure 3. The firm\'s short-run supply c curve is its marg

Question

Figure 3 30. Refer to Figure 3. The firm's short-run supply c curve is its marginal cost curve above a. $1 b. $3. $4.50. d. $6.30. 31. Refer to Figure 3. The firm should shut down if the market price is a. above $8. b above $6.30 but less than $8. c. above $4.50 but less than $6.30. d. less than $4.50. 32. Refer to Figure 3. If the market price falls below $4.50, the firm will earn positive economic profits in the short run. a. b. negative economic profits in the short run but remain in business. negative economic profits in the short run and shut down. zero economic profits in the short run. c. d. 33. If a country allows trade and, for a certain good, the domestic price without trade is lower than t world price, the country will be an exporter of the good. the country will be an importer of the good. a. b.

Explanation / Answer

30. d. $6.30

(A firm’s short-run supply curve is that portion of the marginal cost curve above the average variable cost curve)

31. d. Less than $4.50.

(If the price goes below the average variable cost, the firm should shut down)

32. c. Negative economic profits in the short-run and shut down.

33. a. The country will be an exporter of the good.

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