Imagine Tom's annual salary as an assistant store manager is $30,000, he owns a building that rents for $10,000 yearly, and his financial assets generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. Has Tom made the best decision?
A. Yes, because he's earning an accounting profit of $35,000.
B. No, because he's earning an economic profit of $6,000.
C. Yes, because his accounting profit is larger than his economic profit.
D. No, because his accounting profit is larger than his economic profit.
B. No, because he's earning an economic profit of $6,000.
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If the consumer's income increases while the prices of both goods remain unchanged, what will happen to the budget line?
A) The budget line rotates inward from the intercept on the horizontal axis. B) The budget line rotates outward from the intercept on the vertical axis. C) The budget line shifts inward without a change in slope. D) The budget line shifts outward without a change in slope.
What situation arises when government positions are filled with people who have close ties to the group they are supposed to regulate?
A. Bureaucratic capture B. Collective action C. Governmental lobbying D. Rent-seeking
Both the monetarist view of the economy and the simple quantity theory of money hold that velocity is constant
Indicate whether the statement is true or false
Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.Equilibrium in this market occurs at the intersection of curves S and D.
Figure 4.6Refer to Figure 4.6. If price is P1, the deadweight loss due to under production is area
A. A + C. B. C + F C. F + G. D. E + G.