When a Firm Is at Its Short-Run Break-Even Point

question 16

Multiple Choice

When a firm is at its short-run break-even point

• A) economic profits are positive.
• B) economic profits equal zero and the firm should shut down.
• C) economic profits equal zero and the firm is earning a nominal rate of return on investment.
• D) economic profits are negative but the firm should continue to produce because accounting profits are positive.

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Definitions:

Personal Distress

A self-focused emotional reaction, such as discomfort or pain, to the suffering of others which motivates self-serving behaviors to reduce one's own discomfort.

Reduce One's Own Distress

Engaging in behavior aimed at minimizing personal discomfort or distress.

Altruistic Helping

When a helper seeks to increase another’s welfare and expects nothing in return

Empathy

The ability to understand and share the feelings of another individual.