If a firm is earning a positive economic profit, it means that it:
A. should invest its resources in other business opportunities.
B. has an opportunity cost that is larger than what the firm is currently earning.
C. operating in the long run in a perfectly competitive market.
D. is using its resources in the most profitable way.
Answer: D
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Why is the value added by each producer included in the calculation of GDP instead of his sales revenue?
What will be an ideal response?
A budget constraint
A) represents the bundles of consumption that make a consumer equally happy. B) reflects the desire by consumers to increase their income. C) refers to the limited amount of income available to consumers to spend on goods and services. D) shows the prices that a consumer chooses to pay for products he consumes.
The Phillips curve:
a. is downward sloping. b. is upward sloping. c. shows there is a tradeoff between unemployment and the inflation rate. d. shows there is a tradeoff between population and the inflation rate.
Economists argue that individuals should continue to consume until total benefit equals total cost.
Answer the following statement true (T) or false (F)