Economic profit is a key term in economics and is defined as total revenue
a. plus total cost
b. minus marginal cost
c. minus variable cost
d. minus total cost
e. minus fixed cost
D
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Which of the following correctly identifies an argument against free trade?
A) Free trade reduces world production. B) Free trade hampers technology transfers. C) Free trade increases the wages in importing countries. D) Free trade may result in job loss in some specific industries in the domestic economy.
Protecting intellectual property rights:
A. can reduce total surplus for society. B. never increases total surplus for society. C. never affects total surplus for society. D. always increases total surplus for society.
Suppose there is no change in total revenue when the price changes. The demand curve for this good is:
a. perfectly elastic. b. perfectly inelastic. c. elastic. d. inelastic. e. unitary elastic.
There are two methods of calculating elasticities. One calculates the ratio of the percentage changes in quantity and price, and the other calculates the average percentage changes in quantity and price. We use the second method because it
a. involves an additional calculation b. is not sensitive to direction of movement c. is sensitive to direction of movement d. is never wrong e. always has the same sign