In general, economic profits are:
A. less than accounting profits.
B. the same as accounting profits.
C. greater than accounting profits.
D. not comparable to accounting profits.
Answer: A
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A competitive (price-taking) firm will produce so long as its economic profit is sufficiently above zero to enable the firm to pay the owners of the firm for their time and effort.
Answer the following statement true (T) or false (F)
Equal increases in government purchases and in net taxes have equal but opposite effects on the level of real GDP demanded
a. True b. False Indicate whether the statement is true or false
Characteristics of the short run include: a. at least one fixed input
b. insufficient time for firms to enter or leave the industry in question. c. the applicability of the law of diminishing marginal product. d. all of the above.
If import restrictions prohibit foreigners from selling various goods in the U.S. market,
a. the United States will be able to export more goods abroad. b. foreigners will have fewer U.S. dollars with which to buy goods from Americans. c. the United States will be able to produce a larger output than would otherwise be the case. d. the domestic producers in the protected industries will supply goods to U.S. consumers at lower prices than would otherwise be the case.