A person starts her own business. She quits her $40,000 a year job, rents an office for $15,000 a year, pays wages and salaries of $50,000 a year, utilities of $4,000 a year, and materials of $20,000
She uses her own car for sales work rather than leasing an equivalent car for $6000 a year. If revenues are $140,000, her accounting profit and economic profit are respectively A) $45,000 and $11,000.
B) $45,000 and $5000.
C) $51,000 and $5000.
D) $51,000 and $45,000.
C
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"Coffee Prices Sink As Demand Falls." The newspaper heading
A) assumes the law of demand does not hold. B) confuses demand with quantity demanded. C) misunderstands the role of supply in price formation. D) reverses the actual relationship between price and demand. E) uses the concept of demand correctly.
Centrally planned economies tend to grow more quickly than market economies
Indicate whether the statement is true or false
Refer to the above figure. Suppose demand is D2 and then increases to D3. The change in economic rent is
A) zero. B) area CIHF. C) area CIGO. D) area BJC.
If the economy is in the vertical portion of the AS curve, what will be the effect of an increase in the price level on output produced?
A. Output will increase at a very rapid rate B. Output will not change C. Output will only slightly increase D. Output change cannot be predicted from information given