What is the difference between accounting profit and economic profit?
What will be an ideal response?
Profit is the difference between revenue and cost. Accounting profit excludes the cost of some economic resources that the firm does not pay for explicitly. Economic profit includes the opportunity cost of all resources used by the firm.
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The scarcity of physical resources is far more fundamental to the study of economics than the scarcity of funds.
Answer the following statement true (T) or false (F)
It is possible for one person to have a comparative advantage in the production of all products?
a. True b. False
Which statement is true?
A. Many monopolistic competitors are very large firms. B. Many monopolistic competitors practice perfect price discrimination. C. Monopolistic competitors don't really compete. D. None of these statements are true.
Owners of men's clothing stores traditionally discriminate against males when making hiring decisions because they believe that male customers are more eager to buy clothing from female associates. In reality, however, one's sex does not affect one's sales (i.e., one's sex does not affect one's productivity). Discrimination of this sort throughout the labor market has resulted in clothing stores paying male associates lower wages than they pay female associates. A new men's clothing store enters the industry without these prejudicial beliefs. Which of the following outcomes is not likely to come about?
A. The new store will likely have lower prices than existing stores. B. The new store will make greater profit than it would if it would hold similarly biased views. C. The new store will have lower per-employee labor costs than existing stores. D. The new store will have to hire female associates to compete with its competition. E. The new store will hire more male associates than the typical existing store.