Answer the following statement(s) true (T) or false (F)
1. Bilal has a degree in advertising but has chosen to pursue his dream of being a painter instead of getting an advertising job. The money that Bilal could have earned in advertising is an implicit cost of his painting business.
2. One difference between accounting profits and economic profits is that accounting profits tell whether the firm has covered its monetary costs, but economic profits tell whether the business is worth pursuing.
3. Economic profits are larger than accounting profits because they consider all the monetary costs associated with management and administration and not just the costs of production.
4. Sunk costs are treated as implicit costs because they are not visible and are not considered when making economic decisions.
5. If a firm decides to move to a new location before its lease expires, it can recover the sunk costs associated with the lease agreement.
1. TRUE
2. TRUE
3. FALSE
4. FALSE
5. FALSE
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Refer to Table 9-10
a. Which person has an absolute advantage in the production of pens? pencils? b. Which person has a comparative advantage in the production of pens? c. Which person has a comparative advantage in the production of pencils?
________ is the process of researching and developing profitable new products and services by financial institutions
A) Financial engineering B) Financial manipulation C) Customer manipulation D) Customer engineering
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.
If people (who used to neither borrow nor save) are now borrowing to put their kids through college, then this will cause the equilibrium interest rate
A. to fall. B. to fluctuate wildly. C. to rise. D. to remain constant.