If a firm's revenues just cover all its opportunity costs, then:
A. Normal profit is zero
B. Economic profit is zero
C. Total revenues equal its explicit costs
D. Total revenues equal its implicit costs
B. Economic profit is zero
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If a perfectly competitive firm raised the price of its product,
A) its profits would increase. B) the quantity of output it sells decreases to zero. C) rival firms will follow suit and raise their prices also. D) the firm will be forced to advertise more. E) its total revenue would rise but its total cost would rise by more.
Gross investment is equal to
A) depreciation minus net investment. B) net investment plus capital stock. C) depreciation plus net investment. D) net investment minus capital stock.
Inflation accounting for the debt argues the following:
a. The change in the value of the debt when inflation occurs complicates income tax codes, and is the reason for the tax changes of 2003. b. The portion of interest payments that compensate lenders for inflation should be considered repayment of debt rather than interest expense. c. The debt represents an inflationary problem, and grows more rapidly when people fear inflation. d. The portion of the deficit dedicated to repayment of interest on the debt should not be considered part of the deficit, because it is a transfer.
Suppose a certain good conveys either an external cost or an external benefit. If the private cost of the last unit of the good that was produced is equal to the private value of that unit, then the sum of producer and consumer surplus is maximized
a. True b. False Indicate whether the statement is true or false