The difference between economic profit and accountant’s definition of profit is that an economist’s total cost counts the ____ of inputs.
A. absolute value
B. overheads
C. opportunity cost
D. gross cost
Answer: C
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The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the consumer surplus?
A) $30 B) $9,000 C) $18,000 D) $16,000
To induce an increase in the quantity demanded of its product, a monopolist must reduce the
A) quality of its product and thereby generate a downward shift its ATC curve. B) price of its product and thereby generate a rightward shift in its demand curve. C) price of its product and thereby generate a rightward movement along its demand curve. D) quality of its product and thereby generate a downward movement along its ATC curve.
The assumption of rational behavior:
A. offers a perfect framework for how people actually behave. B. helps economists explain about how people behave in a way that will best achieve their goals. C. explains why people voluntarily engage in decisions for which costs exceed benefits. D. is best applied to psychology and should not be used in the science of economics.
An individual will never buy complete insurance if
a. he or she is risk averse. b. he or she is a risk taker. c. insurance premiums are fair. d. under any circumstances.