Which of the following statements about implicit costs is true?
A. They measure the forgone opportunities of the firm's owners.
B. They do not enter into the calculation of economic profit.
C. They are always fixed.
D. They exceed explicit costs.
Answer: A
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Incompleteness of a contract can be considered boundedly rational if at the time the parties draft the agreement they do not know how they can best react to certain contingencies
Indicate whether the statement is true or false
Refer to the diagram. If the budget line shifts from ab to ac, the:
A. price of K has increased.
B. consumer's money income has fallen.
C. price of K has decreased.
D. price of J has increased.
Consumption spending is $5 million, planned investment spending is $8 million, actual investment spending is $8 million, government purchases are $10 million, and net export spending is $2 million
Based on this information, which of the following is true? A) Aggregate expenditure is greater than GDP. B) Aggregate expenditure is equal to GDP. C) There was an unplanned change in inventories. D) Aggregate expenditure is less than GDP.
Constant returns to scale exist over the range of output for which the long-run average cost is:
a. neither rising or falling. b. falling. c. rising. d. none of these.