There is a technological advance in the production of digital watches. This will cause:
A. demand to increase.
B. supply to increase.
C. the price to increase.
D. supply to decrease.
Answer: B
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At a price of $5, quantity demanded is 70; and at a price of $7, quantity demanded is 50. Since total revenue ________ by the price increase, demand must be ________.
A. is unchanged; elastic B. is increased; elastic C. is decreased; inelastic D. is unchanged; unit elastic
As a waiter you earn $60,000 per year, including tips. Someone offers you a new job as an economic consultant, which pays $100,000 per year. In order to be a consultant, you'll need to rent an office and purchase supplies and new computer equipment. We can conclude which of the following?
a. If the explicit cost for the consulting job is $30,000 per year, your accounting profit is equal to $30,000. b. If the explicit cost for the consulting job is $25,000 per year, your economic profit is equal to $15,000. c. If the explicit cost for the consulting job is $20,000 per year, your economic profit is equal to $80,000. d. If the explicit cost for the consulting job is $20,000 per year, your accounting profit is equal to $140,000.
Which of the following regarding a monopolist is INCORRECT?
A) The monopolist is a single supplier of a good or service. B) The monopolist constitutes the entire industry. C) Only expensive products are produced by monopolies. D) There are barriers to entry that allow monopoly.
Total revenue minus only explicit costs is called
a. accounting profit. b. economic profit. c. average total cost. d. implicit profit.