Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs. The shop earns $600,000 in revenues and has $1.1 million in net worth. Based on this information, what is accounting profit for Tommy's Teddy Bears?
A) $250,000
B) $300,000
C) $500,000
D) $1.35 million
Answer: B
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The Ricardo-Barro effect is based on the idea that ________ when the government has a budget deficit
A) investment demand increases because expected future profits increase B) people decrease their private saving C) investment demand decreases because of the higher real interest rate D) people immediately increase their tax payments E) people increase their private saving
Which of the following is NOT an assumption of the classical model?
A) Wages and prices are flexible. B) People are motivated by self-interest. C) Money illusion exists. D) Pure competition exists.
The rate at which two countries trade one good for another
a. is known as the foreign exchange rate b. is known as the terms of trade c. is known as the export line d. equals the slope of the import line e. equals the common slope of the countries' production possibilities frontiers
Choosing to produce at any point within a production possibilities frontier is:
A. inefficient, meaning the society would not be using all its available resources in their best possible uses. B. efficient, meaning the society would be using all its available resources in their best possible uses. C. unobtainable, meaning the society cannot produce that combination of goods. D. efficient but not attainable.