Which of the following statements is false?
A. If economic profit is negative, accounting profit must also be negative.
B. Explicit costs of using market-supplied resources entail an opportunity cost equal to the dollar cost of obtaining the resources in the market.
C. If economic profit is positive, accounting profit must also be positive.
D. When economic profit is zero, the firm's owners could not have done better putting their resources in some other industry of comparable risk.
E. None of the above statements is false.
Answer: A
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A price floor is:
A. a legal maximum price. B. a legal minimum price. C. a legal maximum quantity that can be sold at a particular price. D. a legal minimum quantity that can be sold at a particular price.
What is Jim's opportunity cost of operating his own business?
a. the total amount of money he puts into capital equipment b. the value of his labor that is put into the business c. the cost of hiring his laborers d. All of the above are correct.
Which of the following is an example of U.S. foreign portfolio investment?
a. Disney builds a new amusement park near Barcelona, Spain. b. A U.S. citizen buys bonds issued by the British government. c. A Dutch hotel chain opens a new hotel in the United States. d. A citizen of Singapore buys a bond issued by a U.S. corporation.
Suppose a capital-abundant large country experiences a significant increase in its capital stock. This change in endowments is most likely to lead to
A. an improvement in the country's terms of trade. B. no change in the price of the labor-intensive good relative to the price of the capital-intensive good. C. an increased willingness to trade. D. a decreased willingness to trade.