If the owners of a business are receiving total revenues just sufficient to cover all of their explicit and implicit costs, then they are:
A. earning a normal profit.
B. doing better than their next best alternative.
C. doing worse than their next best alternative.
D. earning an economic loss.
Answer: A
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If A and B are two sets such that set A is a subset of B, and "Pr" represents the probability, then Pr(A and B) will be:
a. Pr[A]. b. Pr[B]. c. Pr[A-B]. d. Pr[A+B].
The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that:
A. the principle of increasing opportunity costs is relevant. B. society's resources are limited. C. the opportunity cost of producing each product is constant. D. resources are perfectly shiftable between alternative uses.
The assumption that given the strategy chosen by the other participant, a player will always choose the strategy that brings him or her the best payoff is called
A) strategic interaction. B) economic self interest. C) the rationality assumption. D) the profit-maximizing assumption.
Identify the market structure characterized by many small firms selling somewhat different products.
A. Monopoly B. Monopolistic competition C. Perfect competition D. Duopoly