A firm has $200 million in total revenue and explicit costs of $190 million. Suppose its owners have invested $100 million in the company at an opportunity cost of 10 percent interest rate per year. The firm's economic profit is:
A. $400 million.
B. $100 million.
C. $80 million.
D. zero.
Answer: D
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The producer can raise the level of profit by hiring more units of a resource if:
a. the marginal revenue product of the resource is equal to the marginal factor cost. b. the marginal factor cost becomes negative. c. the marginal revenue product of the resource is greater than the marginal factor cost. d. the marginal revenue product falls to zero. e. the marginal revenue product of the resource is less than the marginal factor cost.
If an excise tax is imposed on automobiles,
a. the demand curve will shift upward and the market price will increase b. the supply curve will shift downward and the market price will increase c. the supply curve will shift upward and the market price will increase d. the equilibrium quantity supplied will increase e. the equilibrium quantity demanded will increase
Bill created a new software program he is willing to sell for $200 . He sells his first copy and enjoys a producer surplus of $150 . What is the price paid for the software?
a. $50. b. $150. c. $200. d. $350.
If there is an decrease in government purchases along with a decrease in the marginal tax rate on labor income, then:
a. the income effect would be toward a decrease in labor supply. b. the substitution effect would be towards an decrease in labor supply. c. the overall effect on labor supply is negative. d. all of the above.