Which of the following statements is true?
a. Economic profits ignore implicit costs and revenues.
b. Although implicit costs do not show up in accounting profits, they nevertheless affect managerial decisions.
c. Although explicit costs do not show up in accounting profits, they nevertheless affect managerial decisions.
d. Economists consider sunk costs in their decision making
b
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Cities and towns mainly rely for revenue on
a. property taxes. b. income taxes. c. excise taxes. d. payroll taxes.
Jordan is planning ahead for retirement and must decide how much to spend and how much to save while he's working in order to have money to spend when he retires. When the income effect dominates the substitution effect, an increase in the interest rate on savings will cause him to
a. decrease his savings rate. b. increase his savings rate. c. continue saving at the current rate. d. Any of the above could be correct.
Bill attends a local basketball game. The teams are very unbalanced, the play is bad, and the score quickly reaches 36-2. At halftime, Bill realizes he's having no fun, leaves the game, and goes home. Bill's behavior is NOT determined by
A. sunk costs. B. utility maximization. C. economic logic. D. None of these is true.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.