Laura's Pizza Place incurs $800,000 per year in explicit costs and $100,000 in implicit costs. The restaurant earns $1.3 million in revenues and has $5 million in net worth. Based on this information, what is the economic profit for Laura's Pizza Place?
A) $200,000
B) $400,000
C) $500,000
D) $2.8 million
Answer: B
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The cost of group health insurance is generally lower than if a person buys an individual policy because
A) it is easier for an insurance company to deny claims from a group policy. B) the problem of adverse selection is reduced. C) insuring a group of people eliminates the problem of policy holders having more information than the insurance company. D) this eliminates the problem of moral hazard.
Which supports the economist's claim that buyers don't compete against sellers?
A) Diners would rather have more restaurants to choose among. B) Music buyers prefer having access to internet music stores compared to only the local music shop in town. C) Car buyers prefer several dealerships in the region compared to only one. D) Homebuyers prefer a larger selection of homes to a smaller one. E) All of the above.
When OPEC raises the price of petroleum, American expenditures on oil imports increase, suggesting that
A. the United States’ elasticity of demand for imported oil is greater than one. B. the United States’ elasticity of demand for imported oil is less than one. C. imported oil and domestically produced oil are complementary goods. D. the short-run elasticity of demand for oil is greater than the long-run elasticity.
In a closed economy, national savings is:
A. the sum of the savings of individuals and corporations plus the savings of the government. B. the sum of public savings plus private savings. C. equal to national investment. D. All of these are true.