1. A firm will not shut down in the long run as long as its revenue is                        (larger/smaller) than the firm’s variable cost 2. Your firm has a total revenue of $500, a total cost of...

1. A firm will not shut down in the long run as long as its revenue is
 (larger/smaller) than the firm’s variable cost

2. Your firm has a total revenue of $500, a total cost of $700, and a variable cost of $600. You should

(operate/shut down) because
exceeds
   .

3. In the short run, a firm should shut down when price is less than the minimum of the
 .

4. Suppose Tim’s cowboy boot factory produces in a perfectly competitive market. The average total cost of producing cowboy boots is $65, the average variable cost is $60, and the price of a pair of cowboy boots is $62. If the firm is producing the level of output where marginal cost is
(equal to/greater than/less than) price, then in the short run, the firm should continue to produce since total revenue exceeds total variable cost.

5. When the price of zinc dropped below $1,900, the price dropped below Alcoa’s
price, the company .
 (Related to Application 3 on page 548.)