The principle that the cost of something is equal to what is sacrificed to get it is known as the:
A. marginal principle.
B. principle of opportunity cost.
C. principle of diminishing returns.
D. reality principle.
Answer: B
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If a firm has significant market power, say, over 40 percent, the probability is high that
a. in the long run profits will be zero b. the industry is oligopolistic c. the market is highly competitive d. sales are quite high e. the industry wherein the firm operates has a low four-firm concentration ratio
Rent control is usually justified on the grounds that it protects moderate- to low-income families from the burden of rapidly rising rents and from eviction if they are unable to pay. It also prevents landlords from reaping windfalls as property values rise. Opponents note that rent controls usually lead to a reduced supply of rental housing and shortages. The proponents of rent controls support
them primarily on the grounds of a. efficiency. b. equality. c. externalities. d. cost disease of services.
In contrast to richer countries, most residents of poorer nations will have
a. only some primary education. b. primary and secondary education. c. higher education. d. higher levels of productivity.
What is the difference between accounting profit and economic profit?
a. They are the same thing. b. They are only different if the accountant makes a mistake. c. Accounting profit is usually smaller than economic profits. d. Accounting profit makes no allowance for several implicit costs, including equity capital, while economic profit takes these costs into account.