How can a firm stay in business if it makes no economic profit in the long run?
What will be an ideal response?
Economic profit is money above the full opportunity cost of the resources employed. That means that the owners are fairly compensated for their opportunity costs of time and capital as part of the total cost function.
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In using the composite-good convention in an indifference curve diagram, economists
a. compare the prices of market baskets at different points in time. b. divide the world's production into two classes, goods and services. c. divide the world's goods into two classes, high quality goods and low quality goods. d. lump together all goods but one into a single good measured in a single unit, like dollars.
Between 1981and 2003, government spending as a percentage of GDP
a. remained fairly constant at approximately 10 percent b. remained fairly constant at approximately 33 percent c. decreased from approximately 30 percent to 15 percent d. increased from approximately 15 percent to 30 percent e. increased from approximately 30 percent to 65 percent
Which of the following is correct?
a. The word economy comes from the Greek word for "rational thinker.". b. Economists study the management of scarce resources. c. Because economists believe that people pursue their best interests, they are not interested in how people interact. d. All of the above are correct.
Refer to the accompanying figure. The marginal utility of the 6th pizza is:
A. 17.5 B. 100 C. 95 D. 5