Accounting profits are typically:
A. equal to economic profits because accounting costs include all opportunity costs.
B. greater than economic profits because the former do not take implicit costs into account.
C. smaller than economic profits because the former do not take implicit costs into account.
D. greater than economic profits because the former do not take explicit costs into account.
Answer: B
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Refer to Table 16-3. Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7. How many hours will be purchased and what is her total revenue?
A) 5 hours; total revenue = $35 B) 4 hours; total revenue = $28 C) 3 hours; total revenue = $21 D) 2 hours; total revenue = $14
A market with a negative externality
a. will be regulated by the government b. is an example of a natural monopoly c. will be Pareto efficient, as long as bargaining costs are high enough d. will produce less than the efficient quantity, thereby creating a welfare loss e. will produce more than the efficient quantity, thereby creating a welfare loss
Which of the following is not a characteristic of a perfectly competitive market?
A. There is a large number of small firms. B. Firms sell a homogeneous product. C. Firms can easily enter or exit the market. D. Firms are price makers, not price takers.
The goal of the business firms in a market economy is to maximize
A. Total utility. B. Total welfare. C. Total profits. D. Total sales.