The reason economists assume that firms try to maximize economic profit is
a. over time, firms that don't earn profits will have difficulty securing financing to survive
b. firms in the real world always maximize profit
c. profit is easier to calculate than revenues
d. if a firm fails to earn a profit in its first year, it will go out of business
e. profit maximization is easier for firms than revenue maximization
A
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One factor that might lead to reduced trade or incomplete specialization is
a. absolute advantage b. comparative advantage c. government-enacted barriers to trade d. constant opportunity cost e. decreasing opportunity cost
When the price of coffee increases 5%, quantity demanded decreases 10%. The price elasticity of demand for coffee is ________ and total revenue from coffee sales will ________.
A. inelastic; decrease B. elastic; decrease C. inelastic; increase D. elastic; increase
Keynes (1941) claimed that government spending during wartime could generate a healthy increase in the demand for output, thus raising employment levels and boosting incomes
To avoid inflation, physical rationing, monetary measures and other controls were consequently needed. Indicate whether the statement is true or false
Refer to the World View article titled "North Korea's Food Shortage Grows." If North Korea reduces the size of its military and produces more food, this is most consistent with
A. A laissez faire policy. B. A movement along the economy's production possibilities curve. C. Privatization. D. The law of increasing opportunity costs.