From the standpoint of the economy as a whole, the role of insurance is to greatly reduce or eliminate the risks inherent in life
a. True
b. False
Indicate whether the statement is true or false
False
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Two university graduates, Bill and Steve, worked for an advertising agency at an annual salary of $40,000 each for 3 years after they graduated. Then, they decided to quit their jobs and start a partnership that designs and builds Web sites
They rented an office for $12,000 a year and bought capital for $30,000. To pay for the equipment, Bill and Steve borrowed money from a bank at an annual interest rate of 6 percent. During their first year of operation, the partners' total revenue was $100,000. The market value of their capital at the end of the year was $20,000. If Bill and Steve do not design Web pages, their best alternatives are to return to their previous job. a) What is the firm's economic depreciation? b) What are the partnership's costs? c) What is the firm's economic profit in the first year of operation?
When a firm practices perfect price discrimination,
a. Consumer surplus is maximized b. Producer surplus is minimized c. Producer surplus is maximized d. None of the above
Private costs of an economic activity exceed social cost when external benefits are created
a. True b. False Indicate whether the statement is true or false
The sale of live cattle to a slaughterhouse constitutes a final transaction that is counted as part of the gross domestic product
a. True b. False Indicate whether the statement is true or false