Letters are used to represent the terms used to answer this question: price (P), quantity of output (Q), total cost (TC) and average total cost (ATC). Which of the following equations is equal to a firm's average profit?
A) P - ATC
B) (P - ATC) × Q
C) (P × Q) - TC
D) P - TC
Answer: A
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The United States economy is
A. the third largest in the world. B. larger than all other national economies combined. C. the second largest in the world, behind Japan. D. the largest in the world.
If an event is certain to occur, it has a probability (pr) of
A) 0. B) 0 < pr < 1. C) 1. D) Not enough information to determine.
For a privately owned business in a competitive market setting,
a. reducing resource use while producing the same output adds to profit and typically reduces waste products and thus cuts pollution as well. b. when property rights are well-defined and strictly enforced, the firm will be able to pollute air and water without having to bear the cost of the damages imposed on others. c. wasteful use of resources results in more pollution but greater profit. d. reducing pollution almost never pays.
Elasticity of demand Quantity Price A 4 15 B 12 6
What will be an ideal response?