The cross price elasticity of demand is defined as
A) the percentage change in the supply for one good (a shift in the supply curve) divided by the percentage change in price of a related good.
B) the percentage change in demand for two different commodities.
C) the percentage change in the demand for one good (a shift in the demand curve) divided by the percentage change in price of a related good.
D) the percentage change in price for two different commodities.
C
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Explain the differences between positive economic analysis and normative economic analysis. Which of these approaches do economists generally adhere to and why?
What will be an ideal response?
A perfectly competitive firm's economic profit is maximized by producing the amount of output such that
A) total revenue equals total variable cost. B) marginal revenue equals marginal cost. C) total revenue equals total cost. D) marginal revenue is equal to total revenue.
In the above figure, the efficient amount of output is ________ units
A) 25 B) 50 C) 75 D) 100
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What costs would be considered when calculating economic profit?
A. The opportunity cost of his job and interest forgone of $64,000, and the explicit cost of $8,000 B. The implicit cost of the interest forgone of $4,000 and the explicit cost of $8,000 C. The explicit cost of $8,000 D. The implicit cost of his job of $60,000 and the opportunity cost of forgone interest of $4,000