Recall the Application about the costs involved in opening a restaurant to answer the following question(s).Recall the Application. The $45,000 franchise fee that you would pay to Sonic (the owner of the Sonic Drive-In brand) is considered:
A. a variable cost.
B. part of the marginal cost.
C. part of the marginal revenue.
D. a fixed cost.
Answer: D
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For a firm in monopolistic competition, selling costs
A) increase costs and reduce profits. B) always increase demand. C) can change the quantity produced and lower the average total cost. D) can lower total cost. E) have no effect on the quantity sold.
A standard of deferred payment is most essential in a
a. barter economy. b. cash-only economy. c. credit economy. d. primitive economy.
Economic analysis assumes that
A) individuals act only out of selfish motives. B) people are basically altruistic, and their actions are, therefore, impossible to predict. C) changes in the personal benefits and costs associated with a choice will exert a predictable influence on human behavior. D) although individuals are at times selfish and at times altruistic, only their selfish actions may be predicted.
The problems of externalities and poorly formed property rights are:
A. better solved by private rather than government action. B. the only two legitimate reasons for creating government. C. among several rationales for the existence of government. D. minor in modern economies.