Table 22.1Assume an apple farmer incurs the following costs and revenuesFertilizer$200Seeds$75Water$250Wages$750Property taxes$600Interest payments on borrowed funds$1,200Sales of apples$4,000Suppose the entrepreneur could earn $800 as an employee elsewhere. This means the entrepreneur is earning
A. Accounting losses.
B. Breakeven profits.
C. Economic losses.
D. Economic profits.
Answer: D
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Given the information in the figure above, Liz ________ benefit from trade with Joe because ________
A) can; each of them has a comparative advantage in one of the goods B) can; each of them has an absolute advantage in one of the goods C) cannot; she has an absolute advantage in both goods D) cannot; she has a comparative advantage in both goods E) can; Joe is more productive in producing one of the goods
Structural unemployment
A) falls during the expansion phase of the business cycle. B) falls as the pace of technological progress increases. C) generally lasts longer than frictional unemployment. D) falls when the government provides more generous unemployment compensation benefits.
All of the following are operating expenses for a bank EXCEPT
A) service charges on deposit accounts. B) salaries and employee benefits. C) rent on buildings. D) servicing costs of equipment such as computers.
A simplifying assumption
a. affects the important conclusions of an economic model b. increases the level of detail in an economic model c. makes an economic model a more concrete representation of reality d. eliminates unnecessary details from an economic model e. limits the validity of an economic model's conclusions