When an economist uses the term "cost" referring to a firm, the economist refers to the
A) price of the good to the consumer.
B) explicit cost of producing a good or service but not the implicit cost of producing a good or service.
C) implicit cost of producing a good or service but not the explicit cost of producing a good or service.
D) opportunity cost of producing a good or service, which includes both implicit and explicit cost.
E) cost that can be actually verified and measured.
D
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The quantity demanded of a good or service is the amount that
A) a consumer would like to buy but might not be able to afford. B) is actually bought during a given time period at a given price. C) consumers plan to buy during a given time period at a given price. D) firms are willing to sell during a given time period at a given price.
Perfectly competitive firms are earning economic profits at a market price of $10 and an average total cost of $8. If new firms enter and increase the average total cost for all firms, the market price will ________ until ________.
A) fall; it reaches $8 B) increase; it reaches $10 C) increase; economic profit is equal to zero D) fall; economic profit is equal to zero
On the vertical axis, the production possibilities frontier shows ________; on the horizontal axis, the production possibilities frontier shows ________
A) the quantity of a good; the number of workers employed to produce the good B) the quantity of a good; the price of the good C) the quantity of a good; a weighted average of resources used to produce the good D) the quantity of one good; the quantity of another good
Aggregate income is the sum of:
A. employee compensation, rent, and profits. B. employee compensation, rent, profits, interest, and transfer payments. C. employee compensation and profits. D. employee compensation, rent, profits, and interest.