A firm's accounting profit is called a normal profit when its:
a. accounting profit is equal to zero.
b. economic profit is equal to zero.
c. opportunity cost is equal to zero.
d. average cost is minimum.
e. economic profit is equal to accounting profit.
b
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The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000
Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Refer to the data. Creamy Crisp's explicit costs are: A. $286,000. B. $150,000. C. $94,000. D. $156,000.
If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then profit maximization
A) is achieved when 21 units are produced. B) is achieved by setting price equal to 21. C) is achieved only by shutting down in the short run. D) cannot be determined solely from the information provided.
Which statement is false?
A. The retail market for gasoline is local. B. A market must be at a specific location. C. The market for automobiles is regional. D. The market for some goods and services may be international.
An increase in the income of country A relative to the income of country B will usually lead to an increase in country:
A. A's exports to country B B. B's imports from country A C. A's demand for the currency of country B D. B's demand for the currency of country A