Paul's Plumbing is a small business that employs 12 people. Which of the following is the best example of an implicit cost incurred by this firm?
A. The tax payments on property owned by the firm.
B. The wages paid to the 12 employees.
C. The half of the payroll taxes on the wages of the 12 employees paid by the employers, but not the half paid by the employees.
D. The accounting services provided free of charge to the firm by Paul's wife, who is an accountant.
Answer: D
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Which of the following statements best describes the Phillips curve from a Keynesian viewpoint?
a. From a Keynesian viewpoint, the Phillips curve should slope down so that higher unemployment means lower inflation. b. From a Keynesian viewpoint, the Phillips curve should slope down so that lower unemployment means lower inflation. c. From a Keynesian viewpoint, the Phillips curve should slope down so that higher unemployment means higher inflation. d. From a Keynesian viewpoint, the Phillips curve should slope down so that lower unemployment means higher inflation.
In practice, regulatory boards try to set the price of a natural monopoly so that price:
A. equals marginal cost. B. covers all explicit costs. C. is constant over time. D. includes all costs plus a normal return on capital investment.
Recall the Application about genetic testing and adverse selection to answer the following question(s).According to the Application, what will ultimately happen if genetic testing for certain illnesses like Alzheimer's becomes more common?
A. Only the people who are at high risk for those diseases will purchase insurance against those illnesses. B. Only the people who are at low risk for those diseases will purchase insurance against those illnesses. C. The people who are at high risk for those diseases will decline insurance against those illnesses. D. Only the people who are at high risk for those diseases will be fired from their current jobs.
When government intervenes in the production process because external costs exist, it typically attempts to shift the industry's
A) demand curve to the right. B) demand curve to the left. C) supply curve to the right. D) supply curve to the left.