Economic profit is equal to:
A. total revenue minus accounting profit.
B. total revenue minus the sum of explicit and implicit costs.
C. accounting profit minus explicit costs.
D. accounting profit plus implicit costs.
Answer: B
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The value of marginal product (VMP) of an input such as labor is the
A) additional output produced by the last unit of an input. B) total revenue divided by the units of the input employed. C) extra revenue gained by selling one more unit of output. D) extra revenue gained by employing one more unit of the input.
Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $7, there is an:
A. excess demand of 8 t-shirts. B. excess supply of 8 t-shirts. C. excess demand of 10 t-shirts. D. excess supply of 10 t-shirts.
Refer to Figure 12-5. The figure shows the cost structure of a firm in a perfectly competitive market. If the firm's fixed cost increases by $1,000 due to a new environmental regulation, what happens to its profit-maximizing output level?
A) It remains the same. B) It decreases. C) It increases. D) It could increase, decrease, or remain constant, depending on whether the firm is able to cut costs somewhere else.
The primary disadvantage of the corporation is unlimited liability.
Answer the following statement true (T) or false (F)