Lashondra is the owner/operator of an interior design firm. Last year she earned $400,000 in total revenue. Her explicit costs were $200,000 (assume that this amount represents the total opportunity cost of these resources). During the year she received offers to work for other design firms. One offer would have paid her $120,000 per year and the other would have paid her $130,000 per year. Lashondra's economic profit is equal to
A. $70,000.
B. $200,000.
C. $0.
D. -$50,000.
Answer: A
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A downward movement along the investment demand curve would be caused by a(n):
a. increase in the expected rate of return on investment caused by an increase in business confidence. b. decrease in the expected rate of return on investment caused by a decrease in business confidence. c. increase in the rate of interest. d. decrease in the rate of interest.
Suppose we shopped for a basket of goods in Year 1 and it cost $350. Suppose the same basket of goods adds up to $385 in Year 2. If we use Year 1 as a base year, what would be the Year 2 CPI?
A. 35. B. 90. C. 100. D. 110.
A mixed economy
A. Is justified by the superiority of laissez faire over government intervention. B. Utilizes both market and nonmarket signals to allocate goods and services. C. Is one that allows trade with other countries. D. Relies on the use of central planning by private firms rather than the government.
Activities designed to convert resources into goods and services is known as
A) supply. B) consumption. C) production. D) scarcity.