If a business's total economic cost of producing 2,000 units of a product is $1,000,000 and this output is sold to consumers for $1,300,000, then the firm would earn an economic profit of:
a. $1,300,000
b. $1,000,000
c. $300,000
d. $200,000
Answer: c. $300,000
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In Country A, the government introduced printed pieces of paper that promise to pay the bearers a certain amount of money. People of the country started using the pieces of paper as a medium of exchange. In this country, the printed paper is an example of: a. near money
b. fiat money. c. fiduciary money. d. commodity money.
When a consumer experiences a price increase for an inferior good, if the income effect is
a. greater than the substitution effect, the demand curve will be downward sloping. b. greater than the substitution effect, the demand curve will be upward sloping. c. less than the substitution effect, the demand curve will be upward sloping. d. less than the substitution effect but the substitution effect is positive, the demand curve will be upward sloping.
A tax that does not change consumers’ behavior creates no
A. economic burden. B. excess burden. C. tax revenue. D. tax incidence.
Regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes vases, but Regan is better at producing both. In this case, trade could
a. benefit both Jayson and Regan.
b. benefit Jayson, but not Regan.
c. benefit Regan, but not Jayson.
d. benefit neither Jayson nor Regan