If a perfectly competitive firm's total revenue is less than its total variable cost, the firm
A) should continue to produce and increase its demand.
B) should stop production by shutting down temporarily.
C) should raise its price above its average variable cost.
D) should adopt new technology in order to lower its costs of production.
Question 2
One of the primary reasons that Mexico has experienced relatively low rates of economic growth is that for Mexican entrepreneurs
A) the government has a history of nationalizing all successful domestically-owned industries.
B) incentives from its neighboring Central American countries has attracted most of the foreign investment in the region.
C) problems in the banking system have made it difficult to obtain the funding needed to finance expansion.
D) there is a shortage of low-skilled labor to fill manufacturing jobs.
Question 3
The purchase of a new automobile is included in
A) investment expenditures.
B) consumption expenditures on durable goods.
C) consumption expenditures on nondurable goods.
D) consumption expenditures on services.
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