Accounting profits are typically
A) greater than economic profits because accounting profits do not include explicit costs.
B) greater than economic profits because accounting profits do not include implicit costs.
C) smaller than economic profits because accounting profits do not include explicit costs.
D) equal to economic profits in the long run.
B
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The population of Omega totals one million people, 30 percent of whom are employed. Average output per worker in Alpha is $30,000. Real GDP per person in Alpha totals:
A. $9,000. B. $100,000. C. $21,000. D. $30,000.
Which one of the following is a key to economic development?
A) an educated population B) the removal of property rights C) the preservation of established means of production D) a high level of protection against imported products
The firm in the figure above is ________ that is equal to ________
A) making an economic profit; $5.14 × 7 B) making an economic profit; $3.00 × 7 C) incurring an economic loss; $5.14 × 7 D) incurring an economic loss; ($5.14 - $3.00 ) × 7 E) making an economic profit; ($5.14 - $3.00 ) × 7
Internal economies of scale means that
A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs. B) firms will have lower profits after international trade begins, because costs will be higher than when they just focused on the domestic market. C) consumers will have less choices once trade begins, because firms will be squeezed out of the market. D) simply expanding the size of the market the firm serves reduces overall per unit costs, since the firm can spread costs over more output.