Accounting profit differs from economic profit by the amount of the explicit costs faced by a firm.
Answer the following statement true (T) or false (F)
False
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An inferior good is one for which
a. the compensated demand curve fails to be downward sloping. b. higher prices have relatively little effect on the quantity demanded. c. the income elasticity is positive but less than 1. d. increases in income result in lower quantities demanded.
The price for labor is the wage rate. What happens to the supply of labor if wages increase?
a. It increases. b. It decreases. c. It does not change. d. Uncertain-economic theory has no answer to this question.
In the used car market, the adverse selection problem refers to the fact that a buyer must choose a used car from an undesirable selection of cars.
Answer the following statement true (T) or false (F)
The MRP is
A) the supply curve of labor for an individual firm. B) the demand curve for labor for an individual firm. C) the demand curve for labor for the entire market. D) the supply curve of labor for the entire market.