The difference between zero accounting profit and zero economic profit is that
a. an economic profit of zero indicates a fair rate of return because it includes opportunity cost. opportunity cost and
b. an economic profit of zero indicates an unacceptable rate of return because it does not include opportunity cost.
c. an economic profit of zero indicates more than a fair rate of return because it includes opportunity cost and explicit cost..
d. an accounting profit of zero indicates a fair rate of return because it includes opportunity cost.
a
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A government strong enough to protect individual rights is also strong enough to violate them
a. True b. False
Answer the following statements true (T) or false (F)
1) The annual interest rate that is used to calculate the discount factor is called the discount rate. 2) The longer the period of time until receiving a future amount of money, the more interest that can be earned, so the larger the discount factor. 3) All else equal, the present value of a sum of money will be smaller the larger the interest rate. 4) An annuity factor can be used when payments change each year. 5) All else equal, when a manager is choosing between two payment plans, a profit-maximizing manager should chose the plan with the lowest present value.
The inflation associated with the oil price shocks in the 1970s after OPEC restricted the supply of oil is an example of
A) cost-push inflation due to a supply shock. B) cost-push inflation due to a demand shock. C) demand-pull inflation due to a demand shock. D) demand-pull inflation due to a supply shock.
U.S. manufacturers formed trusts in the late 1880s because
a. booms in the economy made trusts highly profitable and allowed them to expand b. economies of scale allowed larger firms to prosper c. the rapid growth of the railroads allowed firms to reach a wider market d. technological breakthroughs increased capital use and optimal firm size e. they wanted to avoid price wars during depressions