When a firm earns less than a normal profit,
A. economic profit is zero.
B. accounting profit is negative.
C. revenues generated cannot pay all explicit costs and the use of owner-supplied resources.
D. normal profit is negative.
Answer: C
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According to the natural rate hypothesis, if the economy begins at full employment with an unemployment rate of 5 percent and then the inflation rate increases from 2 percent to 4 percent, then the economy will
A) not see any lower unemployment, even temporarily, just higher inflation. B) have lower unemployment but then return to its natural rate with an inflation rate of 4 percent. C) eventually return to its natural rate of 2 percent inflation and its natural unemployment rate of 5 percent. D) eventually return to its natural rate of 2 percent inflation and a new lower unemployment rate. E) stay at the 4 percent inflation rate and the natural unemployment rate will fall.
Which of the following is true if a nation's official money fails to serve as a medium of exchange? a. Nothing will replace money to help facilitate exchange. b. There will be an increase in economic efficiency
c. Resources will divert from production to exchange. d. Transactions costs of exchange will decrease. e. Fewer barter exchanges will be completed.
(Figure: Two SRAS Curves) The figure shows the AD-AS model with two SRAS curves. If the economy is initially at Point A and expected inflation rate remains unchanged, the economy can achieve a real GDP growth rate of 9% only by
What will be an ideal response?
If something serves as a store of value, we expect it to be
A. light. B. divisible. C. durable. D. of intrinsic value.