Arlene makes earrings in the shape of the mascot of a local university. Last year Arlene made 250 pairs of earrings, which she sold to the university bookstore for $10 each. Arlene works out of her home, so her only cost is $3 per pair for materials and $85 for tax help. If Arlene didn't produce earrings, she would spend her time babysitting her nephews and make about $500 per year. Which of the following is TRUE?
Answer: Arlene's economic profit is $1,165.
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Why might incomes of $1 a day and $2 a day underestimate the value of the goods and services that these households actually consume?
What will be an ideal response?
Trade between countries that is without restrictions is called
A) unencumbered trade. B) unabated trade. C) free trade. D) unobstructed commerce.
The process of innovation is the act of
a. discovering a new production process. b. discovering a new product. c. basic scientific research. d. adopting a new product to a market demand.
An assumption behind the infant industry argument for tariff protection is that
A. foreign competitors are selling output below average cost. B. the domestic industry will eventually gain comparative advantage in producing the good. C. the domestic industry will be facing an upward adjustment in its average cost. D. the market needs additional competition to satisfy consumer demand.