The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000
Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Refer to the data. If, other things equal, Creamy Crisp's revenue fell to $286,000:
A. its implicit costs, including a normal profit, would exceed its explicit costs.
B. it would earn a normal profit but not an economic profit.
C. it would suffer an economic loss.
D. its accounting profit would fall to zero.
Answer: B
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The above figure represents a perfectly competitive industry that is taken over by a single firm and operated as a monopoly
a) What was the competitive price and quantity? b) What is the monopoly price and quantity? c) What area represents consumer surplus under perfect competition? d) What area represents consumer surplus under monopoly? e) What area represents the deadweight loss of monopoly?
Nash equilibria are stable because
A) they involve dominant strategies. B) they involve constant-sum games. C) they occur in noncooperative games. D) once the strategies are chosen, no players have an incentive to negotiate jointly to change them. E) once the strategies are chosen, no player has an incentive to deviate unilaterally from them.
An increase in price causes an increase in total revenue when demand is
a. elastic.
b. inelastic.
c. unit elastic.
d. All of the above are possible.
With a regressive tax system, as the level of income increases in an economy, the average tax rate will:
A. remain constant. B. increase. C. decrease. D. either increase or decrease.