Monetary payments to nonowners of a firm are called:
A. implicit costs.
B. accounting costs.
C. explicit costs.
D. economic costs.
Answer: C
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Refer to the scenario above. What is the change in total revenue due to the price reduction?
A) The total revenue increases by $25. B) The total revenue increases by $50. C) The total revenue decreases by $105. D) The total revenue decreases by $175.
An increase in taxes will ________ consumption spending, and a decrease in transfer payments will ________ consumption spending
A) decrease; increase B) decrease; decrease C) increase; decrease D) increase; increase
Suppose the nominal price of gasoline was $0.90 per gallon in 1987. To convert this value to the real price of 1987 gasoline in 2012 dollars, we should:
A) multiply by the 1987 CPI and divide by the 2012 CPI. B) multiply by the 2012 CPI and divide by the 1987 CPI. C) not do anything because this is the real price in 2012 dollars. D) none of the above
Which of the following provides the foundation of the case for free trade?
a. The law of diminishing marginal utility b. The anti-dumping argument c. The industrial diversity argument d. The theory of comparative advantage