Which of the following statements is false?
A) Economic profit will always be less than accounting profit if resources owned and used by the firm have any opportunity costs.
B) Economic costs include the opportunity costs of the resources owned by the firm.
C) Accounting profit is equal to total revenue minus implicit costs.
D) Accounting costs typically include only explicit costs.
Ans: C) Accounting profit is equal to total revenue minus implicit costs.
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Financial intermediation supports economic growth and development by bringing together numerous savers and investors in growing and increasingly complex markets
Indicate whether the statement is true or false
Suppose that consumers' preferences are well behaved in that properties 4-1 to 4-4 are satisfied. Furthermore, assume that both X and Y are normal goods and that the price of good Y decreases. Then, which of the following effects is known with certainty?
A. The income and substitution effects reinforce one another, leading to an overall increase in the consumption of good X. B. The income and substitution effects will reinforce one another, leading to an overall increase in the consumption of good Y. C. The income and substitution effects reinforce one another, leading to an overall decrease in the consumption of good X. D. The income and substitution effects will have competing effects, leading to an indeterminate impact on the consumption of good X.
In the short run, the monopolistic competitor is just like the perfect competitor in that
A) equilibrium is determined by setting price equal to marginal cost. B) either type of firm can earn economic profits, experience economic losses, or break even in the short run. C) each equates marginal revenue and marginal cost in order to maximize profits, with the result that price exceeds marginal revenue. D) new firms enter in the short run when firms are making profits.
An inferior good exhibits
A) a negative income elasticity. B) a downward sloping Engel curve. C) a decline in the quantity demanded as income rises. D) All of the above.