Economic profit is
A. equal to the difference between accounting profit and implicit costs.
B. always larger than accounting profit.
C. the sum of accounting profit and implicit costs.
D. equal to the difference between total revenue and implicit costs.
Answer: A
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Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to nominal GDP in 2017?
A. $24,800 B. $21,000 C. $21,700 D. $24,000
How would a decrease in the price of the feed grains used to feed cattle affect the market for beef?
A. The demand for beef would increase, increasing beef prices. B. The demand for beef would decrease, decreasing beef prices. C. The supply of beef would increase, decreasing beef prices. D. The supply of beef would decrease, increasing beef prices.
Which of the following is not a characteristic of a perfectly competitive market?
A. a large number of firms in a market B. selling a standardized product C. substantial barriers to entry D. an individual firm having no control over price
In general, fiscal policy is used to:
A. make business cycle booms bigger and busts smaller. B. even out the booms and the busts in the business cycle. C. to reverse the pattern of booms and busts in the business cycle. D. make business cycle booms and busts both bigger.