Brodie sells fish in a perfectly competitive market. Suppose the current market price of fish is $4.50 per pound.
A. Brodie can sell as many fish as he can catch at $4.50 per pound.
B. Brodie can charge any price he likes for his fish, but will maximize profit if he sells for less than $4.50.
C. Brodie should charge more than $4.50.
D. Brodie can charge more than $4.50 and still sell some fish.
Answer: A
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The sole proprietor of the Milwaukee Machine Company generates an annual accounting profit of $78,000. She has a standing salary offer of $35,000 a year to work for a large corporation. If she had invested her capital outside her own company, she estimates it would have returned $22,000 this year. What is the sole proprietor's economic profit?
A. $0 B. $21,000 C. $13,000 D. $43,000
When an employer pays the cost of educating a worker, it is likely that the employer
a. is demonstrating altruistic motives. b. is pursuing some objective other than profit-maximization. c. hopes to recapture his investment in the form of increased labor productivity. d. receives reimbursement from the government for the cost of the education.
An example of foreign direct investment is the
A. domestic acquisition of less than 10 percent of a foreign company. B. purchase of livestock from abroad. C. sale of insurance in a foreign nation. D. foreign purchase of an entire domestic company.
The Fed hopes to impact short-run inflation and output by altering:
A. aggregate supply. B. aggregate demand. C. fiscal policy. D. the production function.