The behavior of firms is best understood by focusing on
a. money profit
b. economic profit
c. accounting profit
d. economic profit minus implicit costs
e. money profit minus explicit costs
B
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The price of a good always changes when
A) either a shortage or a surplus occurs. B) quantity demanded and quantity supplied are constant. C) there is an increase in demand and an increase in supply. D) there is a decrease in demand and a decrease in supply.
If player B destroys his own brakes before the race, and player A sees that , what would the new Nash equilibrium be in this case?
a. Player A stops, Player B does not b. Player B stops, Player A does not c. Both players stop d. Neither players stop
An airline is considering adding a flight from Chicago to Sioux Falls. Total cost of the flight is $5,500 . Variable cost is $2,000 . Revenue from the flight is expected to be $3,000 . Should the flight be added?
a. No, the revenue ($3,000 . is below the cost ($5,500.) b. No, the addition to profit is very small and not worth the effort. c. Yes, profit increases by $1,000 ($3,000 ? $2,000.) d. Yes, profit increases by $3,000.
If the Fed sells United States government securities on the open market, this will cause
A. an increase in the interest rate which reflects as increase in money supply. B. interest rates to fall in the loanable funds market. C. an increase in the money supply. D. an increase in the interest rate which discourages borrowing for investment.