Consider a firm that employs some resources that are owned by the firm. When accounting profit is zero, economic profit
A. must be negative and shareholder wealth is reduced.
B. is sure to be positive.
C. must also equal zero.
D. cannot be computed accurately, but the firm is breaking even nonetheless.
Answer: A
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What causes new firms to enter into a monopolistically competitive market structure?
What will be an ideal response?
The reduction of the inflation rate is called
A) deflation. B) disinflation. C) unflation. D) reflation.
In a perfectly competitive market, in response to a permanent increase in demand:
a. the short run equilibrium price will be higher than the eventual long run equilibrium price b. the short run equilibrium price will be lower than the eventual long run equilibrium price. c. the short run equilibrium price will be the same as than the eventual long run equilibrium price. d. we cannot know whether the short run equilibrium price will be above, below or equal to the eventual long run equilibrium price.
If the number of highway deaths among young people is roughly proportional to their beer consumption, and young people's elasticity of demand for beer is 1.5, then to decrease highway deaths of young people by 15 percent, taxes would need to be increased enough to increase the price of beer by:
A. 1%. B. 1.5%. C. 10%. D. 15%.