A. consider a firm that has no fixed costs and that is currently losing money. are there any situations in which it would want to stay open for business in the short run? yes, the firm might want to operate in the long run. no, the firm will want to shut down. yes, the firm will operate if revenue is greater than variable costs. there is insufficient information to make this determination. b. a firm with no fixed costs should shut down. has an accounting profit. has a normal profit. is really in the long run.

Suppose life expectancy in years (l) is a function of two inputs, health expenditures (h) and nutrition expenditures (n) in hundreds of dollars per year. the production function is upper l equals ch superscript 0.40 baseline upper n superscript 0.60l=ch0.40n0.60. beginning with c = 1, a health input of $400400 per year (hequals=44) and a nutrition input of $400400 per year (nequals=44), show that the marginal product of health expenditures and the marginal product of nutrition expenditures are both decreasing. the marginal product of health expenditures when h goes from 44 to 55 is nothing, and the marginal product of health when h goes from 66 to 77 is nothing. (round your answers to three decimal places.)