Which of the following will occur when the capital stock falls?
A) profit per unit of capital will increase
B) profit per unit of capital will decrease
C) there will be no change in profit per unit of capital
D) there will be an ambiguous effect on profit per unit of capital
E) none of the above
A
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Suppose that along a linear demand curve, the elasticity of demand is equal to 1 when the price is $4 and the quantity is 100 units. Then the
A) total revenue is at its maximum when 100 units are produced. B) marginal revenue is positive at 100 units. C) marginal revenue is negative at 100 units. D) Both answers A and B are correct. E) Both answers A and C are correct.
Suppose that during a given time period the implicit cost for a business was $1,500 and that the explicit cost was $6,000. Also suppose that the firm sold 1,000 units of its products at $7 per item. We can conclude that the firm's
A) accounting profit was $1,000, and its economic profit was -$500. B) accounting and economic profits were both $1000. C) accounting profit was -$500, and economic profit was $1,000. D) accounting profit was $1000, and economic profit was -$1,500.
When a negative externality is present in a market, total surplus is:
A. higher when buyers only consider private costs. B. lower when buyers only consider private costs. C. lower when buyers consider social costs. D. None of these statements is true.
Fiat money is money:
a. accepted by law regardless of its intrinsic value. b. that is not included as part of the M1 money supply. c. that is backed by gold or silver held on reserve by the government. d. such as coins that are made from metal.