Which of the following statements is true of explicit costs for a firm?
a. Explicit costs include the opportunity costs of the funds that are invested in a firm
b. Explicit costs do not include the opportunity costs of the funds that are invested in a firm.
c. Explicit costs are deducted from the total revenue of a firm to calculate the economic profit made by the firm.
d. Explicit costs for a firm are always higher than its implicit costs.
b
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Use the following graph for a perfectly competitive firm generating a loss in the short run to answer the next question.
Which area in the graph represents the loss generated by the firm?
A. bcde B. 0beg C. abef D. acdf
If aggregate quantity supplied exceeds aggregate quantity demanded, we can expect an unplanned
A. depletion of inventories, causing firms to raise prices. B. depletion of inventories, causing firms to lower prices. C. accumulation of inventories, causing firms to raise prices. D. accumulation of inventories, causing firms to lower prices.
Refer to the above graph. If the current market price rises from $60 to $70 and user costs are not considered, the extraction quantity:
Refer to the above graph. If the current market price rises from $60 to $70 and user costs are ot considered, the extraction quantity:
A. Rises by 10 units to 20 units
B. Falls by 10 units to 20 units
C. Rises by 10 units to 40 units
D. Falls by 20 units to 10 units
Use the following graph to answer the next question.
All else held constant, higher inflation in the United States relative to that in Canada will cause a(n) ________.
A. decrease in the supply of U.S. dollars B. decrease in the value of the U.S. dollar in terms of the Canadian dollar C. increase in the value of the U.S. dollar in terms of the Canadian dollar D. increase in the demand for U.S. dollars