The market structure in which a firm will choose not to shut
down when price is less than average variable cost is:
None of the above. All
firms will shut down when Price < AVC.
To add, in
economics, average variable cost (AVC) is a
firm's variable costs (labor, electricity, etc.) divided by the quantity of
output produced.
Options:
a. Actual overhead costs below applied overhead costs
b. Actual production units below budgeted production unit
c. Standard direct labor hours below actual direct labor hours
d. The standard variable overhead rate below the actual variable overhead rate
Answer: c. Standard direct labor hours below actual direct labor hours
Explanation: The variable overhead efficiency variance can obtained by multiplying the difference between the actual and Budgeted labour hours by the hourly rate for standard variable overhead. In this case, the outcome may be favorable or unfavorable. The variable overhead efficiency variance will be favorable if the actual labor hours is less than the budgeted hours while it will be unfavorable if the actual labor hours exceed the budgeted labor hours as described in the scenario above.
Answer: foster competition
Explanation:
A free market system is an economic system whereby the individuals and the firms control the market and resources are allocated based on the demand and the supply of the goods and services.
One of the roles of government in a free market system is to Foster competition. The government makes policies which helps to prevent certain producers from having too much power and enable there is a level playing ground for everyone.
Answer:
GDP gap = -2 %
GDP gap = 2%
Explanation:
given data
potential output = 100 trillion
natural rate unemployment = 4 percent
solution
we know as per the Okun's law
the GDP gap will be = -2% ( for every 1% )
the actual unemployment rate exceeds its natural rate
so here if actual unemployment rate = 5 %
GDP gap will be
GDP = ( 5% - 4% ) × -2
GDP gap = -2 %
and
when actual unemployment rate = 3%
so GDP will be
GDP gap = ( 3% - 4% ) × -2
GDP gap = 2%
