If a business's total economic cost of producing 1,500 units of a product is $15,000 and this output sold to consumers for $16,500, then the firm would earn an economic profit of:
a. $16,500
b. $1,500
c. $15,000
d. $1,000
Answer: b. $1,500
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Which of the following examples best describes the Law of Diminishing Marginal Benefit?
A) If a seller of notebooks in a perfectly competitive market charges above the market price, his profit decreases. B) With each additional pen Jill buys, her willingness to pay for another pen decreases. C) Each additional unit of ice cream that John consumes gives him more and more satisfaction. D) If the weather gets cold, the demand for ice cream will fall.
Other things constant, if tuition at a private university rises from $40,000 to $45,000 and revenue for the university decreases, the demand for the good must be
A) increasing. B) inelastic. C) unit elastic. D) elastic.
Marta’s country has advanced technology and highly educated workers. In Jin’s country, workers are also highly educated and have access to the same advanced technology available in Marta’s country. However, the workers in Jin’s country produce more output. What is the most likely cause of this difference?
a. Jin’s country has a smaller population. b. Marta’s country has more people splitting the work. c. Jin’s country has more and better-quality tools, machinery, and factories. d. Marta’s country has better laws protecting property and investments.
Interindustry trade is not based on comparative advantage since it consists of the export and import of similar countries and mostly between countries that have similar productivity, technology, and factor endowments
Indicate whether the statement is true or false