Economic profit is always positive when
A. accounting profit is positive.
B. accounting profit is zero.
C. accounting profit is greater than the firm’s opportunity costs.
D. accounting profit is less than the firm’s opportunity costs.
Answer: C
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Under the Clayton Act, which of the following was illegal, even if it was not shown to lessen competition substantially?
a. Price discrimination. b. Tying contract. c. Horizontal mergers by stock acquisition. d. Interlocking directorates.
Think in terms of the effect a fall in the price level has on aggregate demand (in the AD/AS model) as well as on the aggregate expenditure curve (in the AE model). In the AE model, the AE curve shifts
a. downward, and in the AD/AS model, it decreases the quantity of aggregate demand, which is shown as a movement down along the AD curve b. downward, and in the AD/AS model, it increases the quantity of aggregate demand, which is shown as a movement up along the AD curve c. downward, and in the AD/AS model, it increases the quantity of aggregate demand, which is shown as a movement along the AD curve d. upward, and in the AD/AS model, it decreases the quantity of aggregate demand, which is shown as a movement down along the AD curve e. upward, and in the AD/AS model, it increases the quantity of aggregate demand, which is shown as a movement down along the AD curve
A profit-seeking firm will choose the combination of inputs that:
A. has the lowest average total cost. B. has the lowest average variable cost. C. maximizes profit. D. maximizes costs.
How is foreign trade in inputs similar to trade in outputs?
A. U.S. producers buy (outsource) cheap foreign inputs (labor) while U.S. consumers buy cheap foreign outputs (U.S. imports). B. U.S. producers sell (outsource) cheap foreign inputs (labor) while U.S. consumers buy cheap foreign outputs (U.S. imports). C. U.S. consumers sell (outsource) cheap foreign inputs (labor) while U.S. producers sell cheap foreign outputs (U.S. imports). D. All of the choices are correct.