Total profit is represented by the vertical distance between a total revenue curve and a total cost curve.
Answer the following statement true (T) or false (F)
True
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Assume that production from a automobile manufacturer caused acid rain. If the government imposed a tax on the manufacturer equal to the cost of the acid rain, the government's action would
A) externalize the externality. B) eliminate all acid rain. C) force the manufacturer to move production to another location. D) internalize the externality.
Because Don has health insurance, he is more likely to see the doctor when he has a cold. This is an example of
A) adverse selection. B) moral hazard. C) both moral hazard and adverse selection. D) private information.
If the price of cheese falls by 1 percent and the quantity demanded rises by 3 percent, then the price elasticity of demand for cheese is equal to:
A. 0.333. B. 0.30. C. 30. D. 3.
The change in producer surplus from free trade is equal to area:
a. ?B
b. ?B + C + D
c. ?E + B
d. ?A + B + E