Explicit revenue minus explicit measurable costs equals:
A. normal profit.
B. economic profit.
C. average profit.
D. accounting profit.
Answer: D
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Refer to the figure above. How many units of Good X will be demanded if the government sets a price ceiling of Pc on the good?
A) 0 units B) 10 units C) 25 units D) 35 units
Adam Smith coined the term "invisible hand" to describe the process by which the actions of independent, self-interested buyers and sellers will:
A. always lead to the most efficient allocation of resources. B. often lead to increasing inequality. C. often lead to the most efficient allocation of resources. D. always lead an economy to ruin.
A share of Microsoft stock would best be described as which of the following?
A. A debt instrument B. An underlying instrument C. A means of payment D. A derivative instrument
The price a perfectly competitive firm receives for its output
A) is determined by the interaction of the firm and all of the consumers who buy from the firm. B) is determined by the interaction of all sellers and all buyers in the firm's market. C) will not change in response to changes in market demand and supply because the firm is a price taker. D) will be lowered by the firm in order to sell more output.