Total profit = Total revenue ? Total cost (including opportunity cost).
Total profit defined in this way is called
A. accounting profit.
B. economic profit.
C. absolute profit.
D. relative profit.
Answer: B
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The International Monetary Fund divides nations into three groups. What are the three groups and what are the characteristics of each group?
What will be an ideal response?
Ethan enjoys buying books and going to the movies. He has income of $150 to spend on these two goods each month. The price of a book is $15 and the price of going to the movies is also $15. He currently consumes four books and six movies a month. If the price of a book increases to $20, then:
A. the substitution and income effects would both predict Ethan would consume more of both goods. B. the substitution and income effects would both predict Ethan would consume less of both goods. C. the substitution effect would predict Ethan would consume more books and less movies, and the income effect would predict he would consume less of both. D. the substitution effect would predict Ethan would consume less books and more movies and the income effect would predict he would consume less of both.
Frieda enjoys cooking and baking. Her utility function is U(C, B) = 6C + 3B, where C is the number of hours she spends cooking and B is the hours she spends baking. What is Frieda's MU of cooking?
A. 1/6 B. 2 C. 6 D. It cannot be determined from the given information.
While their respective subject matters differ greatly, both microeconomists and macroeconomists rely on the same basic tools; that is, both rely on
A. government contracts to promote research and publications. B. demand and supply analysis. C. the economic theory of John Maynard Keynes. D. consumer protection laws and antitrust legislation.