A firm has $200 million in total revenue and explicit costs of $190 million. Suppose its owners have invested $100 million in the company at an opportunity cost of 10 percent interest rate per year. The firm's economic profit is:
a. $100 million.
b. $400 million.
c. $80 million.
d. zero.
d
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The U.S. Constitution stipulates that when government uses its takings powers to acquire land for a project,
A) the government must own and operate the completed project. B) the government can resell the land to a private developer. C) the government must turn over the land to state or city governments. D) none of the above
A natural monopoly that is regulated to set its price equal to its marginal cost
A) incurs an economic loss. B) makes zero economic profit. C) makes an economic profit. D) creates the maximum deadweight loss.
Suppose there is a tornado that levels a city. As rebuilding begins, how might you analyze this effect in the market for lumber?
A. The demand for lumber would increase, increasing both the equilibrium price and quantity. B. The demand for lumber would increase, decreasing the equilibrium price and increasing the equilibrium quantity. C. The supply of lumber would decrease, increasing the equilibrium price and decreasing the equilibrium quantity. D. The supply of lumber would increase, decreasing the equilibrium price and increasing the equilibrium quantity.
The short-run aggregate supply curve _____
Fill in the blank(s) with the appropriate word(s).