A tax on alcohol will
A. lower the equilibrium price and lower the equilibrium quantity.
B. lower the equilibrium price and raise the equilibrium quantity.
C. raise the equilibrium price and lower the equilibrium quantity.
D. raise the equilibrium price and raise the equilibrium quantity.
Answer: C
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Total profit = Total revenue ? Total cost (including opportunity cost). Total profit defined in this way is called
a. accounting profit. b. economic profit. c. absolute profit. d. relative profit.
If the government removes a binding price ceiling from a market, then the price paid by buyers will
a. increase, and the quantity sold in the market will increase. b. increase, and the quantity sold in the market will decrease. c. decrease, and the quantity sold in the market will increase. d. decrease, and the quantity sold in the market will decrease.
Retained earnings are
a. earnings of a company that are not paid out to stockholders. b. the amount of revenue a corporation receives for the sale of its products minus its costs of production as measured by its accountants. c. the single most important piece of information about a stock. d. computed by multiplying the dividend yield by the price of the stock.
Toot Sweets Bakery sells freshly baked muffins from 6.30 am at $1.20 per muffin. By 4 pm, the remaining muffins are marked down to $0.60 each. Which of the following statements is true?
A) Toot Sweets is trying to minimize its loss.
B) Toot Sweets engages in price discrimination; a higher price for those who cannot wait and a lower price for those willing to wait until 4 pm.
C) Toot Sweets has underestimated the demand for its muffins.
D) Toot Sweets is trying to prevent the opportunity to make arbitrage profit.