If a business's total economic cost of producing 2,000 units of a product is $1,000,000 and this output is sold to consumers for $1,300,000, then the firm would earn an economic profit of:
a. $1,300,000
b. $1,000,000
c. $300,000
d. $200,000
c. $300,000
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A consequence of an incentive contract for employees is that
a. employees must incur additional risk b. employee level risk is reduced c. employer level risk is reduced d. there are no risk related consequences
The term opportunity cost suggests that
a. in any exchange situation where one person gains, someone else must lose b. not all individuals make the most of life's opportunities c. executives do not always recognize opportunities for profit as quickly as they should d. the only factor that is important in decision making is cost e. because goods are scarce, in order to get some good you must give up some other good in return
In the short run, a perfectly competitive firm is producing an output level where marginal cost equals $10, average total cost equals $7, and marginal revenue equals $9 . Which of the following statements is correct?
a. The firm is earning an economic profit which could be increased by raising output. b. The firm is earning an economic profit which could be increased by lowering output. c. The firm is maximizing its economic profit. d. The firm is suffering an economic loss which could be decreased by raising output. e. The firm is suffering an economic loss which could be decreased by lowering output.
Suppose a country had net exports of $7.5 billion and sold $44.6 billion of goods and services abroad. This country had
a. $44.6 billion of imports and $52.1 billion of exports. b. $52.1 billion of exports and $44.6 billion of imports. c. $44.6 billion of imports and $37.1 billion of exports. d. $44.6 billion of exports and $37.1 billion of imports.