Select the group that best represents the basic factors of production
A) land, labor, capital, entrepreneurship
B) land, labor, money, management skills
C) land, natural resources, labor, capital
D) land, labor, capital, technology
A
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A firm is generating detrimental externalities when
A. MSC is less than MPC. B. MSC is the same as MPC. C. MSC is greater than MPC. D. MPC includes some incidental costs.
Use the following information to answer the next question. Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10% interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 each. Of the $75, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. What is the economic profit generated by Extreme Gaming in the first year?
A. $160,000 B. $280,000 C. $220,000 D. $155,000
If the price of peaches, a substitute for plums, decreases the demand for plums will increase
Indicate whether the statement is true or false
A possible advantage of a horizontal merger for the economy is that
A) the government stands to collect more corporate income tax revenue. B) the merged firm might reap economies of scale which could translate into lower prices. C) the merging firms could avoid losses. D) the degree of competition in the industry will be intensified.