Refer to Scenario 7.6 below to answer the question(s) that follow. SCENARIO 7.6: Upon graduating with an accounting degree, you open your own accounting firm of which you and your assistant are the only employees. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of $50,000 annually. Last year you earned a total revenue of $120,000. Rent and supplies last year were $50,000. Your assistant's salary is $30,000 annually.Refer to Scenario 7.6. Your annual economic profit is
A. -$10,000.
B. $20,000.
C. $40,000.
D. $70,000.
Answer: A
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If the 4 largest cereal companies' total sales are $19 billion and the industry's total sales are $55 billion then according to the Four-Firm Concentration Ratio the industry is
A. an oligopoly. B. a monopoly. C. perfectly competitive. D. monopolistically competitive.
Which of the following is an asset on the consolidated balance sheet of the Federal Reserve Banks?
A. Loans to commercial banks. B. Federal Reserve Notes in circulation. C. Treasury deposits. D. Reserves of commercial banks.
Firm A has assets that are mainly in financial securities and whose liabilities carry variable interest rates; Firm B has the same assets as Firm A and the same amount of liabilities but its liabilities are all at fixed interest rates. If the central bank lowers interest rates, everything else constant:
A. Firm A's net worth will increase more than Firm B's. B. Firm B's net worth will increase more than Firm A's. C. Neither firm's net worth will change. D. The net worth of both firms will increase and by the same amount.
Because Don has health insurance, he is more likely to see the doctor when he has a cold. This is an example of
A) adverse selection. B) moral hazard. C) both moral hazard and adverse selection. D) private information.