Sophia has a business using no owned capital and makes an accounting profit of $52,000 a year. Sophia could have worked for Verizon Wireless with a pay of $35,000 a year, but she would not have had time to run her business. The economic profit from Sophia's business per year is
a. $87,000.
b. $35,000.
c. $17,000.
d. -$17,000.
C
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This Application addresses the concept of
A) inflation and the housing boom. B) the dangers of high interest rates. C) increases in consumer wealth. D) the down-side of leverage.
Estimates of the effect of the user cost on investment vary greatly.
A. True B. False C. Uncertain
When people make a decision to not participate in a program unless they actively enroll for it, program participation is:
A. likely to be higher than if people were automatically enrolled and had to actively opt-out of participating. B. likely to be lower than if people were automatically enrolled and had to actively opt-out of participating. C. likely to be the same as if people were automatically enrolled and had to actively opt-out of participating. D. exclusive, which always makes it more attractive to people.
If there was only full-reserve banking:
A. the financial system would work better. B. absolutely no lending using deposits would be able to occur. C. banks would make more money lending deposits. D. The money multiplier would be at maximum.