Profit can be defined as the
a. difference between the sales revenue of a business firm and the opportunity cost of the resources required to produce the goods supplied by the firm.
b. difference between a company's income and direct monetary costs of production.
c. difference between the price of a product and the consumer's valuation of the good.
d. amount of total revenue earned by the firm minus its payments to stockholders.
A
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Assuming no change in the effort curve of employees, the efficiency wage model implies that
A) the real wage is rigid and equals the efficiency wage. B) the real wage exceeds the marginal productivity of labor. C) an increase in the marginal productivity of capital will increase the real wage. D) the real wage is procyclical.
Many argue the poor are getting poorer, at least in a relative sense. Evidence that contradicts this is that
A) household income of the lowest twenty percent of households relative to the highest twenty percent of households has fallen over the last thirty years. B) the official poverty level of income has increased over the years. C) household spending of the lowest twenty percent of households relative to the highest twenty percent of households has held constant over the last thirty years. D) the pretax distribution of income is more equal than the after-tax distribution of income.
Poverty is
A. an absolute, not a relative concept. B. a relative concept, not an absolute. C. both an absolute and a relative concept. D. neither an absolute nor a relative concept.
One of the biggest benefits of a market-based economy is
A. centralized planning. B. the ability to adapt quickly to change. C. consumer protection policies. D. government regulation.